lectur5-page39 - Will the shelves be bare in a very short...

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39 39 Price: RATIONS consumption over time given a certain income!!! Grocery Store Example. This afternoon, let’s assume that you hear a radio broadcast indicating that Food Lion off of Avent Ferry road is having a special sale. Everything in the store will have a price = 0, or it is free. What will happen? Will it be a mad house? Will people go bonkers? How long will items remain on shelves? Will employees be able to stock the shelves as fast as people will be removing items from the shelves? Will trucks be able to bring commodities from the warehouse as fast as people will cart commodities out of the store.
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Unformatted text preview: Will the shelves be bare in a very short time? Will fights break out as two people try and grab the last loaf of bread at the same time? Will normally peaceful, law abiding people turn into ????? What will be left at the Food Lion for consumption tomorrow? Prices ration consumption over time. They allow for the matching of consumption and production. Prices allow us to expect a ready supply of goods and services tomorrow. Prices help keep us peaceful and law abiding in our encounters with others. The power of prices is amazing....
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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