CHAPTER 7: THEORY OF MARKET SOCIALISM-Under which of the following rules would socialist managers operate in a Lange system?

CHAPTER 7: THEORY OF MARKET SOCIALISM
MULTIPLE-CHOICE QUESTIONS
1. The major problem Lange faced in formulating his model of socialism was
a. the lack of computers in this early period.
b. who should staff the CPB.
c. how to make the task of the CPB manageable.
d. the lack of motivation of capitalist managers in a capitalist state.
2. Under which of the following rules would socialist managers operate in a Lange system?
a. Maximize revenue.
b. Maximize revenue and set P = AC.
c. Hold costs to a minimum while producing the planned outputs.
d. Set P = MC and minimize costs.
3. In the cooperative model of market socialism, it is generally assumed that enterprises seek to
maximize
a. social welfare.
b. net revenue per worker.
c. enterprise profits.
d. the rate of return on social capital.
4. The condition under which equilibrium will exist in the cooperative enterprise model is
a. F = MC.
b. MR = MC.
c. value of marginal product of labor equals net revenue per worker.
d. P = MR.
5. Who among the following is a strong supporter of the cooperative model as an economic system?
a. Ward
b. Lange
c. Vanek
d. Schultz
6. According to the text, market socialism is often said to be an attractive economic system because
a. it always uses central planning to make allocation decisions.
b. it combines socialist equity with capitalist efficiency.
c. worker participation is guaranteed.
d. none of the above.
7. According to the text, one can generally argue that
a. income distribution is more even under socialism than under capitalism.
b. income distribution is more even under capitalism than under socialism.
c. income distribution does not differ from one system to another.
d. none of the above.
8. Many have argued that when market capitalism and market socialism are compared, market
socialism is likely to be
a. slightly less stable.
b. much less stable.
c. more stable.
d. none of the above.
9. In the 1990s, an important issue in characterizing the nature of a socialist economic system is
a. the role of the state.

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b. the nature of surplus value.
c. the nature of “special dimensions.”
d. all of the above.
10. As we look at contemporary real-world economic systems, it is evident that
a. market socialism is an important system variant.
b. market socialism is not an important system variant.
c. the former systems of the Soviet Union and Eastern Europe were market
socialist systems.
d. none of the above.

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