Final answer:
Incentive theory is demonstrated when schools pay students for reading, which can effectively increase desired behaviors but may also reduce intrinsic motivation. Efficiency wage theory is an economic example where higher wages encourage greater productivity and retention.
Step-by-step explanation:
An example of incentive theory is when schools use rewards to promote certain behaviors among students, such as paying second-grade students to read books and pass quizzes to improve reading comprehension.
While effective for increasing certain behaviors, tangible rewards can have negative effects on intrinsic motivation compared to intangible rewards like praise. Economic theories such as efficiency wage theory also provide examples where improved pay encourages higher productivity and reduces employee turnover, influencing motivation within the workplace.