The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest
A. using rationing coupons that cannot be resold.
B. using rationing coupons that can be resold.
C. using rationing only on weekdays.
D. using rationing on a first-come, first-served basis.
Answer: B
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The absolute price of a commodity is the amount of
a. other goods that must be sacrificed in order to purchase one unit of the commodity. b. resources required to produce one unit of the commodity. c. currency needed to purchase one unit of the commodity. d. time and effort used to develop a market for the buying and selling of the commodity.
An individual in the labor force whose employment was involuntarily terminated is
A) a job leaver. B) a job loser. C) a job reentrant. D) part of the PPI.
The theory of rational expectations implies which of the following?
a) unemployment and the rate of inflation are directly related b) an increase in the money supply will have no effect on price level c) attempts to decrease unemployment below the natural rate lead to depression d) attempts to decrease unemployment through government policy will be thwarted by people's reactions e) government policies work only if the money supply increases by 10 percent
Partial equilibrium analysis is the process of examining the equilibrium conditions for households and firms combined for more than one but not all individual markets.
Answer the following statement true (T) or false (F)