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  • 1. Role of Producers & Consumers
    in a Market Economy
    EPF2a. Incentives
  • 2. Essential question:
    What is an incentive?
    2
  • 3. Incentives
    Definition: something that makes a person try or work hard or harder
    Incentives influence people’s behavior
    3
  • 4. Essential question:
    How do incentives influence behavior?
    4
  • 5. Incentives influence behavior by:
    A positive incentive is a reward or other inticement that ENCOURAGES a behavior
    Ex. prizes, wages
    A negative incentive is a penalty that DISCOURAGES behavior
    Ex. library fine, parking ticket
    5
  • 6. Essential question:
    How do consumers, producers, workers, savers, investors & citizens respond to incentives?
    6
  • 7. Value and/or lower price is an incentive for consumer
    7
  • 8. Profit is an incentive for producers
    8
  • 9. Pay and benefits are incentives to workers
    9
  • 10. Interest earned is an incentive for savers
    10
  • 11. Capital gain is an incentive for investors (ex. buying at $10 & selling at $15 = a $5 capital gain)
    11
  • 12. Citizens have an incentive to vote for politicians who share their views
    12
  • 13. Interest groups have an incentive to seek to influence politicians to vote in ways that benefit their group.
    13