Google
Thursday 
May 26, 2022 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
YIELD CURVE: A curve plotting the yields (or returns) on securities with different maturity lengths. The standard yield is for U.S. Treasury securities with lengths ranging from 90 days to 30 years. The five maturity lengths are usually 90 day, 180 day, 2 year, 5 year, 10 year, and 30 year. The shape and slope fo the yield curve indicates the state of the economy and what's likely to come. A normal yield curve has a slight positive slope, with slightly higher yields for longer maturity securities. A steep yield curve suggests the end of a contraction and beginning of an expansion. An inverted, or negatively sloped yield curve is the sign of an upcoming contraction.

Visit the GLOSS*arama


RATIONING:

The distribution or allocation of a limited commodity, usually accomplished based on a standard or criterion. The two primary methods of rationing are markets and governments. Rationing is needed due to the scarcity problem. Because wants and needs are unlimited, but resources are limited, available commodities must be rationed out to competing uses.
Rationing is the process of distributing a given amount of goods or services among competing users. It is largely synonymous with resource allocation. The term often arises in everyday use when a basic necessity, like food or gasoline, has a sudden temporary shortage. Society then faces the task of allocating, or rationing, this newly limited amount.

Rationing, however, is an ongoing process. All goods, services, and resources with limited quantities that fall short of desired uses must be rationed. Because, such rationing is an ongoing process, it seldom gains much public notoriety.

Suppose, for example, that imports of petroleum from other countries suddenly decline, which then limits the availability of gasoline. Society is faced with how to allocate the existing quantity of gasoline. A lot of people want limited amount of gasoline. This is exactly the type of event that brings the term rationing to the forefront of public discourse.

However, even during periods when gasoline appears to be abundant, the quantity is still limited. Everyone cannot have all that they want. Rationing takes place. But this rationing is not particularly newsworthy. It is handled by the day-to-day economic activity of market exchanges.

All About Scarcity

Rationing is a direct consequence of the scarcity problem. Society has limited resources and unlimited wants and needs. As such, it must decide how the resources are used. It must decide who gets what. It must ration limited quantities of the resources.

Markets and Governments

Society has developed two primary methods of rationing, or allocating, limited resources, goods, and services--markets and governments.
  • Price Rationing: Markets allocate commodities through price rationing. If the quantity of a given commodity becomes increasingly limited, then the price rises. Only the buyers most willing and able to buy the commodity, and pay the higher price, obtain the good. The limited quantity is automatically rationed to the highest bidder.

    While price rationing is most obvious in a market with an increasingly limited quantity and a suddenly rising price, it is the standard function performed by all markets. Markets ration commodities through prices.


  • Regulatory Rationing: Governments allocate commodities through what can be termed regulatory rationing. That is, governments pass laws determining who receives what. Any number of criteria can be set for regulatory rationing. For example, each person might receive an equal share or some might receive more based on a determination of need.

    Regulatory rationing is often used when governments decide that price rationing does not work properly. In particular, a government might deem that the sudden price increase of an essential good like food or gasoline creates undue hardships for the poor. As such, they might establish a system for rationing the commodity using coupons, price ceilings, or some other mechanism that does not involve higher prices.


<= RATIONAL IGNORANCEREAL-BALANCE EFFECT =>


Recommended Citation:

RATIONING, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: May 26, 2022].


Check Out These Related Terms...

     | price rationing | resource allocation | voluntary exchange | involuntary exchange |


Or For A Little Background...

     | equity | incentive | exchange | market | price |


And For Further Study...

     | government functions | distribution standards | allocative efficiency | shortage | auction | ownership and control | price ceiling | utility analysis | short-run production analysis | elasticity |


Search Again?

Back to the WEB*pedia


APLS

PINK FADFLY
[What's This?]

Today, you are likely to spend a great deal of time at an auction hoping to buy either a set of serrated steak knives, with durable plastic handles or a pair of blue silicon oven mitts. Be on the lookout for door-to-door salesmen.
Your Complete Scope

This isn't me! What am I?

The first "Black Friday" on record, a friday marked by a major financial catastrophe, occurred on September 24, 1869 -- A FRIDAY -- when an attempted cornering of the gold market induced a financial crises and economy-wide depression.
"Try not to become a man of success, but rather try to become a man of value. "

-- Albert Einstein

L/I
Letter of Intent
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 ©2000-2022 AmosWEB*LLC
Send comments or questions to: WebMaster