The incentive problem under communist central planning refers to the idea that: Group of answer choices a) workers, managers, and entrepreneurs could not personally gain by responding to shortages or surpluses or by introducing new and improved products. b) exports had to be equal to imports for a central plan to work. c) planners had to direct required inputs to each enterprise. d) the immediate effect of more investment was less consumption.

Question

Social Studies

Titus Nixon

6 June, 08:03

The incentive problem under communist central planning refers to the idea that: Group of answer choices a) workers, managers, and entrepreneurs could not personally gain by responding to shortages or surpluses or by introducing new and improved products. b) exports had to be equal to imports for a central plan to work. c) planners had to direct required inputs to each enterprise. d) the immediate effect of more investment was less consumption.

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Answers (1)

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Lexi Murray · Answer 1

The correct answer is letter A.

Explanation: The biggest problem of socialism is not the lack of knowledge, but the inability to calculate.

Only a market economy allows efficient resource allocation, something impossible in socialism.

The absence of private ownership of the means of production prevents the emergence of market prices, which in turn makes it impossible to make economic calculations on profit and loss, making the allocation of scarce resources irrational and inefficient.