Coordination problems have led to the failure of command systems. Which of the following best exemplifies this problem?
A. Command economies try to minimize the use of capital goods, making production less efficient.
B. Managers had no incentive to address market surpluses or shortages, as long as they met production goals.
C. Workers were not motivated to work hard because of a lack of consumer goods to purchase.
D. The complexity of production processes made it difficult to assure that all necessary inputs were provided at the right time and in the right amount.
Answer: D
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If the GDP deflator in the United States is 114, and the GDP deflator in Ukraine is 142, which of the following changes would the theory of purchasing power parity predict? (The Ukrainian currency is the hryvnia.)
A) The demand for the dollar will fall since the dollar is overvalued. B) The demand for the dollar will rise since the dollar is undervalued. C) The supply of the dollar will fall since the dollar is undervalued. D) No prediction regarding changes in the demand or supply of the dollar can be made without information on the exchange rate between the United States and Ukraine.
An efficient tax is
A) a tax that raises a maximum amount of revenue. B) a tax that imposes a small excess burden relative to the tax revenue that it raises. C) a tax that imposes an equal tax burden on buyers and sellers. D) a tax that is used to fund research and development of new technology.
A profit-maximizing monopolistically competitive firm produces and sells an allocatively efficient quantity of output
Indicate whether the statement is true or false
If the income elasticity of demand for a good is .59, then it is what type of good?
a. Price elastic. b. Price inelastic. c. Income inelastic. d. Income elastic. e. Inferior.