Question

Peter lived in the Union of Soviet Socialist Republics (USSR). In 1987, he ran the finest pirozhki shop in Leningrad. The USSR was a command economy at the time, so the government mandated a daily production quota of 500 pirozhki. Each day, Peter would make the allotted pirozhki, close the shop, bring the pirozhki to the local government market, and claim his government wages. The demand for his pirozhki was always greater than his supply, so the 500 pirozhki would sell out within 15 minutes. Which statements are valid reasons why Peter did not make more pirozhki to meet demand? Valid reasons Peter did not make more pirozhki: a. Peter reached his daily production goal, so he had no incentive to make more pirozhki. b. The government planners did not provide any incentives for Peter to produce more than his quota, even if he knew there was demand for them. c. Peter would receive a larger wage if he brought more pirozhki than his quota to the government market (i.e., if he brought 2,000 pirozhki). d. Peter did not have freedom of enterprise or freedom of choice. e. Peter knew that making more pirozhki would result in using part of his wages to upgrade the pirozhki shop facade, as well as the equipment. f. A command economy system is not focused on maximizing profits.

          Peter lived in the Union of Soviet Socialist Republics (USSR). In 1987, he ran the finest pirozhki shop in Leningrad. The USSR was a command economy at the time, so the government mandated a daily production quota of 500 pirozhki. Each day, Peter would make the allotted pirozhki, close the shop, bring the pirozhki to the local government market, and claim his government wages. The demand for his pirozhki was always greater than his supply, so the 500 pirozhki would sell out within 15 minutes. Which statements are valid reasons why Peter did not make more pirozhki to meet demand? Valid reasons Peter did not make more pirozhki: a. Peter reached his daily production goal, so he had no incentive to make more pirozhki. b. The government planners did not provide any incentives for Peter to produce more than his quota, even if he knew there was demand for them. c. Peter would receive a larger wage if he brought more pirozhki than his quota to the government market (i.e., if he brought 2,000 pirozhki). d. Peter did not have freedom of enterprise or freedom of choice. e. Peter knew that making more pirozhki would result in using part of his wages to upgrade the pirozhki shop facade, as well as the equipment. f. A command economy system is not focused on maximizing profits.

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