It Is Difficult for a Central Planner to Determine Optimal

question 206

Multiple Choice

It is difficult for a central planner to determine optimal allocations of resources because:

• A) of the simplicity of a modern economy.
• B) of a potential lack of incentives among citizens who are asked to provide the central planner with accurate information.
• C) of too many incentives governing the central planner.
• D) the incentives exist to manipulate the resources to improve the allocations of resources.

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Definitions:

P(A ∩ B)

The probability of the intersection of events A and B, representing the likelihood that both events occur simultaneously.

P(A ∪ B)

Represents the probability of the occurrence of at least one of two events, A or B, including the case where both events occur simultaneously.

P(A ∩ B)

The probability that events A and B both occur, also known as the intersection of A and B.

Venn Diagram

A graphical representation for showing symbolically the sample space and operations involving events in which the sample space is represented by a rectangle and events are represented as circles within the sample space.