Which of the Following Statements Is False

question 85

Multiple Choice

Which of the following statements is false?

• A) Decisions about what to produce in the former Soviet Union were made primarily by political leaders.
• B) Soviet planners consistently set prices that were too high, and this led to severe shortages.
• C) Soviet plant managers lacked incentives to adopt new technologies.
• D) Soviet plant managers lacked incentives to cut costs.

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Definitions:

Pollution Tax

A tax levied on the amount of pollution emitted by firms to incentivize reduction in environmental harm.

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services and goods.

External Costs

Costs that fall on third parties who are not directly involved in a transaction or economic activity.

Marginal Social Costs

The total cost to society of producing one extra unit of a good or service, including both private costs and any externalities.