The Incentive Problem Under Communist Central Planning Refers to the Idea

question 2

Multiple Choice

The incentive problem under communist central planning refers to the idea that

• A) planners had to direct required inputs to each enterprise.
• B) workers, managers, and entrepreneurs could not personally gain by responding to shortages or surpluses or by introducing new and improved products.
• C) the immediate effect of more investment was less consumption.
• D) exports had to be equal to imports for a central plan to work.

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Definitions:

Hyperbola

A type of conic section that appears as two symmetrical curves, defined mathematically as the set of points where the difference of the distances to two foci is constant.

Standard Form

A way to write numbers using the digits 0-9, where each digit is given a place value, or for equations, a specific arrangement, such as \(Ax + By = C\) for linear equations.

Method of Substitution

A technique used to solve systems of equations where one equation is solved for one variable in terms of the others, and then substituted into another equation.

System of Equations

A collection of two or more equations with the same set of unknowns.