Allocating Goods & Services
Allocating Goods & Services ECON 221
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This 1 page Class Notes was uploaded by Kaylee Wakai on Monday October 10, 2016. The Class Notes belongs to ECON 221 at University of South Carolina taught by Elizabeth Watson in Fall 2016. Since its upload, it has received 23 views.
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Date Created: 10/10/16
Answering“whogetsit?” Firstcomefirstserve Efficientmeansthatthegoodorservice Goodsgotowhoevergetstherefirst goestothepersonwhovaluesitthemost Canbeefficientwhenyouhavealarge Wouldstillliketoconserveresources numberofsimilaritemsthatpeopleonly and,byextension,goodsandservices occasionallyvalue Wanttoanalyzetheincentivescreatedby Generallyinefficientforallocatingmost ourallocationmethod consumptiongoods Whatincentivesdowehaveto Incentiveistodonothingbutwaitin produce lines,unlessbeingproductivewill Whatincentivesdowehaveto somehowmoveyoutothefrontofthe consume lineyouhavenoneedtoproduce Whatincentivesdowehaveto anything conserve/replenish PersonalCharacteristics DifferentAllocationMethods Goodsgotothepeopletheproducers RandomDrawing likethebest Auction Canbeefficientwhenallocatingtime PersonalCharacteristics andpersonalenergy Competition Incentivesaretomakeyourselflikable FirstComeFirstServe Force(Stealing) Price Goodsgothepeoplewillingto sacrifice Force(Stealing) themost Goodsgotothestrongestormost Canbeefficientifothergoodsand powerful resourcesarealsoallocatedbyaprice Ifyoumustforciblytakesomething,you mechanism couldnotofferanythingforamutually beneficialtrade RandomDrawing Decreasesincentivetoproduce Goodsgototheluckiest,nottheperson Leastefficient whovaluesitthemost Incentivetoproduceandconserveis higher Competition Goodsgotowhoeverhasspentthemost timepracticing,studying,hasthemost talent,etc. Canbeefficientinthesensethatthe peoplewhovalueitthemostwillalsobe thepeoplewillingtosacrificethemost timeandeffortpracticing,studying,etc. Allocatingallgoodsbyfootraceorexam wouldbeextremelyinefficient Haveverylittleincentivetobeproductive orconserveresources
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