What is an incentive system?
What will be an ideal response?
An incentive system is a method of organizing production that uses a market-like mechanism inside the firm. Instead of issuing commands, senior managers create compensation schemes that will induce workers to perform in ways that maximize the firm's profit.
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Which of the following is TRUE?
A) A common market is more deeply integrated than a customs union. B) The European Union is a shallower and broader form of integration than NAFTA. C) NAFTA is an example of a customs union. D) Customs unions require the creation of a common currency.
Income taxes tend to be favored over sales taxes _____
a. because of the excess burden on income taxes b. on the benefit principle c. on equity grounds d. as long as income as defined using the Haig-Simons definition