Which of the following statements is true?
A) Command economies do a better job at maximizing social welfare in comparison to market economies.
B) The incentive problem and the coordination problem lead to lower efficiency in market economies.
C) Central planners in command economies have to make decisions that prices would automatically have made in market economies.
D) Bringing economic agents together to trade is easier in command economies than in market economies.

Question

Quizplus · Accepted Answer

Central planners in command economies are tasked with making decisions regarding production, distribution, and pricing of goods and services—decisions that, in market economies, are typically made through the price mechanism based on supply and demand. This fundamental difference highlights the role of central planning versus market-driven decisions.

Which of the Following Statements Is True