Explain the distinction between a command system and an incentive system
What will be an ideal response?
A command system uses a managerial hierarchy, where commands pass downward through the hierarchy and information (feedback) passes upward. These systems are relatively rigid and can have many layers of specialized management. Incentive systems use market-like mechanisms to induce workers to perform in ways that maximize the firm's profit.
You might also like to view...
What would likely happen to the long-run aggregate supply curve if the U.S. federal government increases marginal tax rates on wages?
A) The LRAS curve would remain stable while the AD curve would shift leftward. B) The LRAS curve would remain stable while the AD curve would shift rightward. C) The LRAS curve would shift leftward. D) The LRAS curve would shift rightward.
In the Cournot model, if one firm increases its output
A) the market will not clear because now there is a surplus. B) the market price drops, reducing the revenues received by the other firms. C) the others will kick it out of the oligopoly. D) the other firms are unaffected.
Decreasing returns to scale and diminishing returns differ in that
a. Diminishing returns is a long-run concept while decreasing returns to scale is a short-run concept. b. Diminishing returns is a short-run concept while decreasing returns to scale is a long-run concept. c. Diminishing returns is a both short and long-run concept while decreasing returns to scale is a short-run concept. d. Diminishing returns is a long-run concept while decreasing returns to scale is a short and long-run concept.
Paternalism leads people to:
A. use their abilities as well as possible and purchase only what they need regardless of price. B. buy only what they need instead of what they want because doing otherwise is bad environmental stewardship. C. make decisions that are good for themselves that they might not have made on their own. D. consider what their parents would do when making decisions even though they themselves might not make those same decisions.