3. If the government decides to increase the monetary amount of disability insur

Question

3. If the government decides to increase the monetary amount of disability insurance payments to those that have been permanently disabled, it will make life easier for those who have been disabled. According to our discussion in class, the fact that it could cause some individuals to falsely claim to be disabled would be considered: a. A direct response to an incentive b. An indirect response to an incentive c. A normative response to an incentive d. An opportunity cost e. A marginal cost 3. If the government decides to increase the monetary amount of disability insurance payments to those that have been permanently disabled, it will make life easier for those who have been disabled. According to our discussion in class, the fact that it could cause some individuals to falsely claim to be disabled would be considered: a. A direct response to an incentive b. An indirect response to an incentive c. A normative response to an incentive d. An opportunity cost e. A marginal cost

Explanation / Answer

Answer 3. b

Some individuals falselY claiming the benefits of this policy incentive is an indirect response to an incentive by the government.

The direct response and beneficiaries would be the disabled who would truly enjoy the benefits of the insurance scheme.

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