Which of the following economic actions demonstrates a negative incentive?

Question

Responses

An employee is fired.
An employee is fired.

An item is put on sale.
An item is put on sale.

The costs of production decrease.
The costs of production decrease.

The board of a company invests more.

Answer 1

The economic action that demonstrates a negative incentive is:

An employee is fired.

This action serves as a penalty for behavior that does not meet the company's expectations or standards, discouraging certain actions or behaviors. The other options either encourage positive behavior or are neutral in terms of incentive.