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Chapter 1: Problem 21

Would there be a need for a rationing device if scarcity did not exist? Explain your answer.

Short Answer

Expert verified
No, there would not be a need for a rationing device if scarcity did not exist. The basic function of a rationing device is to manage the distribution of scarce resources. If there were unlimited resources, there would be no requirement to ration.

Step by step solution

01

Understanding Scarcity

Scarcity refers to the basic economic problem of having seemingly unlimited human wants in a world with limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
02

Understanding the Rationing Device

A rationing device is a means for deciding who gets what portion of the available resources or goods. They are necessary because of the basic economic problem of scarcity. This includes price rationing, where goods are distributed to those willing to pay the price, queue rationing, where goods are distributed first-come-first-serve, and more.
03

Interdependency of Scarcity and The Rationing Device

From understanding both scarcity and the rationing device, you can infer that the need for a rationing device arises only when there is scarcity. If scarcity did not exist, meaning resources and goods were limitless, then there would be no need to decide who gets what 鈥� rationing would become unnecessary.

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Most popular questions from this chapter

Discuss the opportunity costs of attending college for four years. Is college more or less costly than you thought it was? Explain.

Is it possible for a person to incur an opportunity cost without spending any money? Explain.

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