Assuming one can derive a correct input-output table, are there still any reasons to prefer the market to central planning?
What will be an ideal response?
The market reflects consumer choice. The input-output table considers only production efficiency. Also, the market can react more quickly to changes in cost and especially to changes in demand. An input-output table is expensive to construct and use, whereas the market doesn’t requires a special computer program. Finally, the government would have to decide what will be produced in a centrally planned economy, versus consumers deciding in a market.
You might also like to view...
The slope of the linear consumption function represents autonomous consumption expenditures
Indicate whether the statement is true or false
Suppose Carrie's utility function for clams is as follows: If she consumes 1 clam, she gets 10 units of total utility; for 2 clams, she gets 18 units of total utility; for 3 clams, she gets 24 units of total utility; for 4 clams, she gets 28 units of total utility; for 5 clams, she gets 30 units of total utility; and for 6 clams, she gets 26 units of total utility
a. Carrie gets 9 units of marginal utility for the 2nd clam. b. Carrie gets 8 units of marginal utility for the 3rd clam. c. Carrie gets 7 units of marginal utility for the 4th clam. d. None of the above are true.
Using supply and demand analysis, which of the following is true?
A. The burden of a tax on production cannot be determined on the basis of who actually pays the tax. B. The burden of a tax on production is always split evenly between consumers and sellers. C. Consumers bear the entire burden of a per unit tax on production. D. Sellers bear the entire burden of a per unit tax on production.
The GDP per capita is the most practical way to
A. Measure how much income households receive. B. Make international comparisons of the standard of living. C. Measure how much output can be consumed on a sustainable basis. D. Analyze the growth rate of the economy through time.