"Because the Outputs of Many Industries Are the Inputs to Other

question 146

Multiple Choice

"Because the outputs of many industries are the inputs to other industries, the failure of any single industry to fulfil the output quantities specified in the central plan caused a chain reaction of adverse repercussions on production." This quotation best identifies the

• A)incentive problem under central planning.
• B)self-sufficiency dilemma under communism.
• C)resource overcommitment problem under communism.
• D)coordination problem under central planning.

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Definitions:

Quantity Sold

The total number of units of a product or service that have been purchased in a given period.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in its price.

Demand Curve

A visual chart that illustrates how the quantity of a product or service desired by buyers varies with its price.

Unitary Elasticity

A situation in economics where a change in the price of a good or service results in a proportional change in the quantity demanded or supplied.