Multiple Choice
Which of the following must be TRUE for an ordeal mechanism to be effective?
A) The disincentive to work from taxing the high-income individuals must be minimized.
B) The disincentive to work for welfare recipients must be less than the additional social welfare received from making them better off.
C) The gains from the program to welfare recipients must exceed the cost imposed on welfare recipients.
D) The cost imposed on welfare recipients must be equal to zero.
Correct Answer:

Verified
Correct Answer:
Verified
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