ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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market spikes
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price neutrality
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price flexibility
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administrative expenses
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Detailed explanation-1: -Which of the following is the best argument against the rationing system used in the United States during World War II? Some people could still get as much as they wanted through the black market.
Detailed explanation-2: -Rationing function Prices ration scarce resources when demand outstrips supply. When there is a shortage, price is bid up – leaving only those with willingness and ability to pay to buy.
Detailed explanation-3: -The rationing function of the price mechanism Whenever resources are particularly scarce, demand exceeds supply and prices are driven up. The effect of such a price rise is to discourage demand, conserve resources, and spread out their use over time.
Detailed explanation-4: -One of the most commonly used rationing devices used in a capitalistic (market-based) economic system is price. Those who are willing and able to pay the price for a given good (or resource) can purchase it. Other rationing devices are used, as well.