Suppose Resources Are Directed by Means of a Central Planner

question 212

Multiple Choice

Suppose resources are directed by means of a central planner who receives information on all the different uses of these resources. Why might sellers have an incentive to not provide truthful information to the central planner?

• A) Sellers want to be able to charge the minimum price for their product.
• B) In order to continue producing their product, sellers may overstate the importance of that product.
• C) The information system is too complex to provide correct information.
• D) They want resources to be able to travel to the highest-value uses possible.

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Definitions:

John C. Calhoun

A prominent American statesman and political theorist from South Carolina who served as Vice President and was a staunch defender of states' rights and slavery.

John Quincy Adams

John Quincy Adams was the sixth President of the United States, serving from 1825 to 1829, and was known for his strong opposition to slavery and his role in the Amistad case.

White House

The formal dwelling and office of the United States President, positioned at 1600 Pennsylvania Avenue NW, Washington, D.C.

1824

The year marked by the United States presidential election, which was ultimately decided in the House of Representatives, leading to John Quincy Adams’ presidency.