The Apply the Concept feature explains that the Feeding American charity asked three professors at the University of Chicago’s Booth School of Business to design a more efficient way of allocating food to local food programs and that the professors proposed changing the food allocation system to one that resembled a market.
a. Under the new system, the “shares” each food program receives would be the equivalent to what economic variable that consumers use in the marketplace to bid for goods and services?
b. The number of shares a food program needs to receive certain types of food would be equivalent to what economic variable in the marketplace for goods and services?
c. One of the University of Chicago professors advising Feeding America noted, “Much of the food that is distributed through food banks often originates with donors—large manufacturers or distributors—far from [local food bank’s] needy clients.” Why might this fact make it more likely that a market mechanism would improve the well-being of people receiving
food from local food banks?