Google
Sunday 
October 13, 2024 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
BANK RUN: A situation in which a relatively large number of a bank's customers attempt to withdraw their deposits in a relatively short period of time, usually within a day or two. While common throughout the 1800s and early 1900s, government deposit insurance has largely eliminated banks runs in the modern economy. Historically a bank run was prompted by fears that the bank was on the verge of collapse, causing deposits to become worthless. Ironically a bank run often caused the bank to fail. Bank runs were often infectious, leading to economy-wide bank panics and business-cycle contractions.

Visit the GLOSS*arama


FOR WHOM?:

The allocation question that determines the distribution of goods and services among the members of society. In can be stated as: Who receives the goods and services produced with society's limited resources? This is one of three basic questions of allocation. The other two are What? and How?
The For Whom? question of allocation arises because society faces the fundamental problem of scarcity--wants and needs are unlimited, but resources are limited. Because society lacks sufficient resources to produce every good that every person desires, society must decide who receives the goods and services produced. Does society give all goods to benevolent economic instructors? Does it distribute production according to shoe size (with larger feet receiving more goods)? Does it let people with more income buy more production?

The two primary methods used to answer the For Whom? question are markets and government. Markets employ voluntary exchanges among buyers and sellers. Governments make use of laws, rules, and regulations that are involuntarily imposed on members of society.

Markets

Markets address the For Whom? question by allowing people with more income to purchase more production. Those who can afford to buy goods are the ones who receive the goods. But people have more income if they own and control resources that are more highly valued by society.

Suppose, for example, that Dr. Dowrimple T. Bedside, a skilled medical doctor, is planning to purchase a new residential domicile. Dan Dreiling, a skilled drywall installer, is also in the market for a new house. Both have their eyes on a well-maintained, nicely landscaped, four-bedroom structure conveniently located near shopping and school.

Although both Dr. Bedside and Dan Dreiling are skilled in their chosen professions, society places a higher value on the work performed by Dr. Bedside. While an hour's worth of drywall installation pays Dan Dreiling in the neighborhood of $30, and hour's worth of medical practioning pays Dr. Bedside a more lucrative $300. The end result is that Dr. Bedside has more income and a greater ability to purchase the house.

How does this illustrate resource allocation and the For Whom? question. The higher price paid for Dr. Bedside's labor means he has a greater ability to purchase goods. In fact, with ten times the income, Dr. Bedside can purchase ten times the amount of production as Dan Dreiling.

Government

Governments address the For Whom? question by dictating who receives production and who does not. This can be accomplished either directly through legal mandates (laws, rules, and regulations) or indirectly through the collection and spending of tax revenues.

Suppose, for example, that the government of Northwest Queoldiolia, a quaint and courteous country, decides that left-handed people should have higher living standards and receive a larger share of the nation's production.

One way to achieve this goal is to pass a law stipulating that for the same price, left-handed people receive ten percent more goods and services than right-handed people. For example, a left-handed person would receive a large pizza for the price of a medium, while a right-handed person would receive a medium pizza for the price of a medium. Any seller violating this edict would be subject to criminal prosecution, jail time, and a hefty fine.

How does this address the For Whom? question? In all likelihood, sellers will seek to avoid punishment by giving left-handed people more output at the same price. The end result is that left-hand people will be better off and be able to consume more goods and services.

Alternatively, the government of Northwest Queoldiolia could place a tax on right-handed people, then give the resulting revenue to left-handed people. How does this address the For Whom? question? Prompted by this income redistribution program, left-handed people would have more income that could be used to purchase goods and services, while right-handed people would have less.

<= FLEXIBLE PRICESFOREIGN EXCHANGE =>


Recommended Citation:

FOR WHOM?, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: October 13, 2024].


Check Out These Related Terms...

     | three questions of allocation | What? | How? | distribution standards | needs standard | equality standard | contributive standard |


Or For A Little Background...

     | scarcity | limited resources | unlimited wants and needs | allocation | third rule of inequality | equity |


And For Further Study...

     | equity | economic analysis | seven economic rules | normative economics | incentive | four estates | political views | ownership and control | government functions | production possibilities | marginal productivity theory | factor market analysis |


Search Again?

Back to the WEB*pedia


APLS

BLACK DISMALAPOD
[What's This?]

Today, you are likely to spend a great deal of time looking for a downtown retail store wanting to buy either car battery jumper cables or a dozen high trajectory optic orange golf balls. Be on the lookout for strangers with large satchels of used undergarments.
Your Complete Scope

This isn't me! What am I?

The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
"Progress begins with the belief that what is necessary is possible. "

-- Norman Cousins, editor, writer

SOFFEX
Swiss Options and Financial Futures Exchange
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2024 AmosWEB*LLC
Send comments or questions to: WebMaster