Question: How does the price system serve as a rationing mechanism?

How does the price system serve as a rationing mechanism?

Step by Step Solution

★★★★★

3.35 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Our economy cannot produce everything that all its citizens want The pricing system hel... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1431-B-E-M-E(8983).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

In the lemons model, there is only one price even though the products differ in quality. Why is that? What factors deter-mine that price? How does the price affect the quantities traded of the...

Q:

Suppose that the world price of sugar is 10 cents a pound, the United States does not trade internationally, and the equilibrium price of sugar in the United States is 20 cents a pound. The United...

Q:

In the long run, how does the price of running shoes and the quantity the firm produces change? What happens to the market output? Use the following figure, which shows the situation facing a...

Q:

-Answer the following questions simply and clearly : 1. Economists often say that price are a "Rationing mechanism." If the supply of a good falls, how do prices "ration" these now-scarce goods in a...

Q:

1. Economists often say that prices are a "rationing mechanism." If the supply of a good falls, how do prices "ration" these now-scarce goods in a competitive market? 2. Is the "rationing" achieved...

Q:

Figure 6-4 Price $8.00 7.00 6.00 5.00 4.00 D 30 40 50 60 70 Quantity 13. Refer to Figure 6-4. If the government imposes a price ceiling in this market at a price of $5.00, the result would be a a....

Q:

Figure 6-7 price 10 9 8 7 6 5 1 ID 10 20 30 40 50 60 70 80 diy Refer to Figure 6-7. Suppose a price floor of $7 is imposed on this market. As a result, the quantity of the good demanded decreases by...

Q:

Figure 6-7 price 10 9 8 7 6 5 1 ID 10 20 30 40 50 60 70 80 diy Refer to Figure 6-7. Suppose a price floor of $7 is imposed on this market. As a result, the quantity of the good demanded decreases by...

Q:

Figure 6-7 price 10 9 8 7 6 5 1 ID 10 20 30 40 50 60 70 80 diy Refer to Figure 6-7. Suppose a price floor of $7 is imposed on this market. As a result, the quantity of the good demanded decreases by...

Q:

Figure 6-7 price 10 9 8 7 6 5 1 ID 10 20 30 40 50 60 70 80 diy Refer to Figure 6-7. Suppose a price floor of $7 is imposed on this market. As a result, the quantity of the good demanded decreases by...

Q:

Finnegan and Wakely Limited produces solar panels for domestic installation. The panels go through three departments (cost centres) in the production process: cutting, fixing and finishing. In August...

Q:

Accounting for lease by lessor and lessee. IBM manufactures a particular computer for $6,000 and sells it for $10,000. Adair Corporation needs this computer in its operations and contemplates three...

Q:

Which of the following audit procedures would least likely result in the discovery of repairs and maintenance expenses inappropriately capitalized as assets? vouching amounts recorded as repairs and...

Q:

b. Under what conditions would this shutdown decision maximize Hondas economic profit (or minimize its economic loss)?

Q:

Between 1990 and 1991, real disposable income (in 2000 dollars) barely increased at all, owing to a recession. (It rose from $5,324 billion to $5,352 billion.) Use the data on real consumption...

Q:

Explain the difference between final goods and intermediate goods. Why is it sometimes difficult to apply this distinction in practice? In this regard, why is the concept of value added useful?

Q:

Explain the difference between government spending and government purchases of goods and services (G). Which is larger?

Q:

Chapter 19 Problem 19-08 Build a Model Maggie's Magazines (MM) has straight nonconvertible bond that currently yield 9%. MM's stock sells for $22 per share, has an expected constant growth rate of...

Q:

please solve this with in 1 hour Question 1 4 points The fundamental law of active management (only one possible answer) assumes active management will always outperform passive management. a can...

Q:

Question 3: Confidence Interval i. List three strategies used to reduce the width of a confidence interval to make your estimate more precise. [ 2 marks] ii. A researcher is designing a study to...