Economics A-Level
Incentives
What Incentives means in Economics A-Level, as defined for AQA.
Definitions of Incentives
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Reference: AQA
Rewards that encourage enterprise and hard work, which excessive equality may reduce, while a more unequal distribution provides strong incentives for risk-taking and capital accumulation.
Personal motivations altered by tax changes, such as the post-tax return on labour or retained profits that encourage firms to invest in capital.
What cuts in income tax or corporation tax increase for workers and firms, shifting the LRAS curve to the right.
Motivations involved in a transaction, which can be financial gain or altruistic, such as civic duty.
As the wage rate increases, the financial incentive to enter the profession rises.
Topics that use Incentives
- How markets and prices allocate resources (AQA A-Level)
- Influences upon the supply of labour to different markets (AQA A-Level)
- Supply-side policies (AQA A-Level)
- The distribution of income and wealth (AQA A-Level)
Related terms
- Economic incentives
- Equity vs efficiency
- Market failure
- Asset Ownership
- Asset Price Inflation
- Asymmetric information
- Capital investment
- Demographics
Using Incentives in the exam
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