"Under central planning, some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time. This is a nearly impossible task without markets and profits." This quotation best
identifies the:
A. incentive problem under central planning.
B. coordination problem under central planning.
C. self-sufficiency dilemma under communism.
D. resource overcommitment problem under communism.
Answer: B
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Suppose you have worked at a local sandwich shop for six months and now you plan to ask your manager for a raise. How can you convince your manager that you are worth more money than you are currently being paid?
A) by convincing him that you are a dedicated worker and ready to take on more responsibilities at the shop B) by explaining to him how difficult it is for you to save enough money to go to college C) by demonstrating to your manager the marginal revenue product your employment contributes to the sandwich shop D) by threatening to quit if he refuses to give you a raise
All of the following are possible outcomes of a financial crisis EXCEPT
A) bank failings and disintermediation. B) a recession. C) an increase in domestic consumption. D) depreciation or devaluation of a currency.
A business is employing inputs such that the marginal product of labor is 40 and the marginal product of capital is 90. The price of labor is $20 and the price of capital is $30. If the business wants to minimize costs while keeping output constant, then it should:
A. Use more labor and less capital B. Use less labor and less capital C. Use less labor and more capital D. Make no change in resource use
A tradeoff is illustrated by
A) a point inside the PPF. B) a point outside the PPF. C) a change in the slope of the PPF. D) the negative slope of the PPF.