Princess Peach of the Mushroom Kingdom has decided to centra…

Princess Peach of the Mushroom Kingdom has decided to centrally manage the economy to ensure that resources are allocated “fairly.” A council of advisors determines where power-ups, coins, and extra lives should be distributed, believing they can direct them to the areas of greatest need. However, problems arise—some regions have an abundance of Super Mushrooms but no Fire Flowers, while others have plenty of coins but no 1-Ups. Meanwhile, the kingdom’s fastest runners complain that warp pipes are being placed inefficiently, slowing travel between regions. What fundamental problem of central planning does this scenario best illustrate? ​

Suppose the government is considering two policies to suppor…

Suppose the government is considering two policies to support low-income workers: (1) implementing a binding minimum wage above the equilibrium wage, or (2) providing a wage subsidy to employers for each low-wage worker they hire. From an economic perspective, which of the following statements is most accurate?