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Gasoline Rationing
- In the year 1974 and again in the year 1979, the government imposed price controls on gasoline.
- This resulted in scarcity and gasoline was rationed.
- Non-price rationing is the alternative to market rationing.
- Under one form everyone has an equal chance to purchase rationed good.
- Gasoline can be rationed by long lines at the gas pumps.
* Rationing hurts some by limiting the amount of gasoline they can buy.
* This can be seen in the model given below.
* It applies to a woman having an annual income of $20,000.
The price of a laptop increases by 20% and there is a 40% drop in the quantity demanded.
What actions could a government take in order to keep the price above market equilibrium? There are four basic possibilities here; 1) Minimum price; 2) A tax on the good
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