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Question: please explain carefully...

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Coismption Is inerficiently high 16. A constant rent (as a remuneration scheme) a) usually does not fulfil the participation constraint b) usually does not fulfil the incentive compatibility constraint c) usually does not provide for an optimal allocation of risk d) requires that effort is observable None of the remaining answers is correct. 17. The following is NOT an externality generated by driving a car: a) the possibility of reaching the destination faster c) d) e) noise environmental pollution the possibility of hitting a pedestrian a nice engine grumble

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