1.3. On January 31, 1990, the first McDonald's opened in Moscow, capital of the then Soviet Union. Economists often described the Soviet Union as a "permanent shortage economy,"

where the government kept prices permanently low in order to appear "fair."

"An American journalist on the scene reported the customers seemed most amazed at the

'simple sight of polite shop workers . .. in this nation of commercial boorishness."'

(Source: http://www.history.com/this-day-in-history.do?

action=Article&id=2563.)

a. Why were most Soviet shop workers

"boorish" when the McDonald's workers in Moscow were "polite"?

b. What does your answer to the previous question tell you about the power of eco nomic incentives to change human behavior?

In other words, how entrenched is "culture"?

McDonald's in Moscow: The First Day Price Ceilings and Floors • CHAPTER 5 • 89