ECON 103 Chapter Notes - Chapter 5: Economic Surplus, Demand Curve, Marginal Cost
2 Feb 2017
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Allocated resources by order of someone in authority. Pro: - work well in organizations where activity is easy to be monitor. Con:- work poorly when that is a large activity and is hard to monitor: majority rule. Pro: - the decision being made affect large numbers of people: contest. Pro: -the effort of the players are hard to monitor and reward directly: first-come, rst - served. Pro: - when scare resource can serve just one user at a time in a sequence, it minimize the time sent waiting for the resources to be free: lottery. To those who pick the winning number. Pro: - lottery works the best when there is no effective way to distinguish among potential users of a scare resource: personal characterisitics. Pro: - essential to uphold the principle of the rule of law. Price = what we pay: individual demand and market demand.
