Will rate PLEASE BE VERY THOUROUGH and elaborate The term ra

Will rate. PLEASE BE VERY THOUROUGH and elaborate.

The term \"rationing\" often has a pejorative meaning when used in everyday conversation, but it means something different to an economist What does rationing mean to an economist and how do prices perform rationing? Is the price system of rationing more just or unjust than any other method of rationing?

Solution

Rationing generally means control over scare resources to meet demands of various groups. But to Economist it means how goods or resources are allocated in the economy. Prices perform rationing by letting those who have purchasing power to have a good, buy that good and by stopping others who do not have purchasing power from its use. Not only this, scare resources tend to have higher prices and will be allocated to only those sectors which can buy them at higher prices. In others to those sectors which produce more value.

B it depends on value system. For some Economists like Adam Smith it is more just whileas for marxs and other it is unjust. In general we can say that price mechanism pushes those who have less purchasing power out of the market. Since they are poor so they are at a disadvantage. On the other hand it meets conspicuous consumption needs of rich. In socialism etc care is taken of poor also. Thus we can say it is more unjust than others