Question

Suppose the government imposes regulations that reduce the amount of pollution in the air. In four or more sentences, define incentive, explain the government's incentive for this regulation and how effective this process is.

Answer 1

An incentive is something that motivates an individual to perform an action. The study of incentive structures is central to the study of all economic activities (both in terms of individual decision-making and in terms of co-operation and competition within a larger institutional structure). Ultimately, incentives aim to provide value for money and contribute to organizational success. Government’s incentive is very effective among big companies because they will be force to do better and a reward is also waiting for them.