An example of a transfer payment is

Which of the following statements is true of incentives?

A) Incentives can be financial or moral, but not coercive. B) Incentives can be financial or coercive, but not moral. C) Incentives are designed to change behavior. D) Incentives are always in the form of rewards.

If the production possibilities curve in France is bowed out and the curve in Spain is a straight line, then we know that

a. no trade can take place between France and Spain b. the terms of trade will always be in favor of France c. the terms of trade will always be in favor of Spain d. the law of increasing costs apply to France but not to Spain e. the law of increasing costs apply to Spain but not to France f. the opportunity costs of producing goods in France are constant