In Gacacia, the government is considering implementing a policy to encourage citizens to use public transportation instead of private cars. They implement a policy offering a tax reduction for the purchase of mass transit tickets.

Question

This policy would be considered what economic term?

Opportunity Cost

Incentive
Taxation

Marginal Benefit

Answer 1

The policy offering a tax reduction for the purchase of mass transit tickets would be considered an Incentive. Incentives are designed to encourage specific behaviors, in this case, promoting the use of public transportation over private cars by making it financially more attractive for citizens to purchase mass transit tickets.