ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Higher prices are an incentive to sellers to increase production to make more goods. But the biggest incentive for sellers is knowing that when prices rise, their profits will probably rise, too.

Detailed explanation-2: -Some common synonyms of incentive are goad, impulse, inducement, motive, and spur. While all these words mean “a stimulus to action, ” incentive applies to an external influence (such as an expected reward) inciting to action. a bonus was offered as an incentive.

Detailed explanation-3: -For example, a rise in the price of any good is an incentive for us to back off from buying it as much as we used to. Perhaps we’ll buy a different good instead. So, for example, a rise in the price of butter creates an incentive to buy less butter.

Detailed explanation-4: -Compensation incentives. Compensation incentives tend to cover some of the more basic incentive options. Recognition incentives. Reward Incentives. Appreciation incentives.

Detailed explanation-5: -Economic Incentives – Material gain/loss (doing what’s best for us) Social Incentives – Reputation gain/loss (being seen to do the right thing) Moral Incentives – Conscience gain/loss (doing/not doing the ‘right’ thing) 15-Jun-2014