Question

To allocate scarce goods and resources, a market economy uses _______ . This means that individuals will get the goods and services if they _______.

1)
Non-price rationing
Preferential Treatment
Price Rationing

2)
Have the ability to pay
Meet the governments requirements
Stand in line at the store

Answer 1

To allocate scarce goods and resources, a market economy uses price rationing. This means that individuals will get the goods and services if they have the ability to pay. The term price rationing is used in economics to denote the controlled distribution of a scarce good or service. During a period of rising prices the consumption of some essential, scarce commodities, such as rice, wheat, pulses, clothes, sugar is restricted.

Answer 2

One of his definitions says that economics is the science that studies the allocation of scarce resources and resources.

A market economy is characterized by free capital mobility and free entry. The regulation of this type of market is given by free trade and the law of supply and demand, which has the price as an adjustment vector. Thus, if the resource is scarce, the price is high and demand fits. On the contrary, when the resource is abundant, the price is low and the demand adjusts.

Thus, to allocate scarce goods and resources, a market economy uses price rationing. This means that individuals will receive the goods and services if they have the ability to buy.