Problem
1. What is a coordination mechanism? Give an example.
2. True or false? For a market to have a coordination mechanism, money must be exchanged. Explain.
3. True or false? Only money prices affect incentives; shadow prices do not. Explain.
4. What is the incentive compatibility problem? Give an example.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.