Asked by Katie Flynn on Jul 05, 2024
Verified
"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.
Central Planning
An economic system where the government or central authority makes all decisions regarding the production and distribution of goods and services.
Coordination Problem
The challenge of aligning decisions and actions among various parties to achieve a common goal.
Inputs
Resources such as labor, materials, and capital that are used in the production process to create goods or services.
- Realize the innate issues and inefficiencies in centrally planned economies, particularly those related to incentives and coordination issues.
Verified Answer
BG
Bruno GuimaraesJul 09, 2024
Final Answer :
B
Explanation :
The quotation highlights the difficulty of coordinating production and distribution of goods without the signals provided by markets and profits, which is known as the coordination problem under central planning.
Learning Objectives
- Realize the innate issues and inefficiencies in centrally planned economies, particularly those related to incentives and coordination issues.