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Critical Analysis Questions Chapters 1 & 2 Macroeconomics Week 1

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Critical Analysis Questions (Chapter 1 & 2)3. a. What method is used to ration goods in a market economy? How does this rationing method influencethe incentive of individuals to supply goods, services, and resources to others?Ans:-The ration goods are based on price mechanism in market economy. While Price is affected bydemand and supply. Normally the producers sell their products to suppliers who sell products inthe market for small margins. Producers ask price whatever they think is good price for them.However price increases with increased demand of goods (Walter,2006). Suppliers supply/sellsgoods, products and services to other people in order to earn money and they use this earnedmoney on buying other products, goods and services they need, This rationing method is influencedby the price mechanism of products, goods or services as higher the prices of goods, products andservices the more the incentives of the individuals to supply goods, services and resources toothers.(b)How are grades rationed in your economics class? How does this rationing method influencestudent behavior? Suppose the highest grades were rationed to those whom the teacher liked best.How woul ...
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