Question

Identify each of the following quotes as being an example of either: the coordination problem, the invisible hand, creative destruction, or the incentive problem.a. "If you compare a list of today’s most powerful and profitable companies with a similar list from 30 years ago, you will see lots of new entries:" . b. "Managers in the old Soviet Union often sacrificed product quality and variety because they were being awarded bonuses for quantitative, not qualitative, targets:" . c. "Each day, central planners in the old Soviet Union were tasked with setting 27 million prices—correctly:" . d. "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest:" .

Answer 1

Answer:

creative destruction Defined by Schumpeter as the revolution within the sysem for nw companies to be created and fated to destroy the old industry

"If you compare a list of today’s most powerful and profitable companies with a similar list from 30 years ago, you will see lots of new entries:"

incentive problem As we create an incentive for a particular outcome or directions the other aspects and characteristics are neglected.

"Managers in the old Soviet Union often sacrificed product quality and variety because they were being awarded bonuses for quantitative, not qualitative, targets"

the coordination problem the information in an economic system s too complex to be calculated

Each day, central planners in the old Soviet Union were tasked with setting 27 million prices—correctly

Invisible hand direct quote from Adam Smith description of how capitalism economy works

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest

Explanation: