An incentive compensation scheme includes
a. a performance evaluation system
b. a disciplinary action committee
c. a reward system linked to performance
d. Both A&C
d
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Macroeconomics is the branch of economics that concerns
a. the behavior of individual actors in the economy b. output in a specific industry c. the overall health of the economy d. the federal government only e. prices in a specific industry
Suppose there are 3 voters in a legislature, and two projects are up for consideration. Project A creates benefits of 3 for district 1 but benefit of -1 in district 2 and -3 in district 3. Project B creates benefits of 3 in district 2, -1 in district 1 and -3 in district 3. a. Would either of these projects be implemented under simple majority rule voting (where each project is approved or not approved on its own)?
b. How would your answer to (a) change if the projects can be bundled? c. Is it efficient to fund these projects? d. Suppose the Coase Theorem applies to legislatures -- i.e. suppose legislators can create alternatives with cash side-payments. What might voter 3 do to prevent the outcome in (b)? e. True or False: If transactions costs are low and side-payments are allowed, only efficient projects will pass under vote trading. What will be an ideal response?