Government leaders often do not understand basic economic theory showing how inefficient price controls and rationing are.
It is the most efficient way for government leaders to obtain the large amounts of expensive food they need for soldiers.
It is the most efficient way for government leaders to obtain the large amounts of expensive fuel they need for tanks.
It is the most efficient way for government leaders to obtain the large amounts of food and fuel they need for helping the poor.
Total votes: 45
Learning objectives:
Understanding price controls.
Understanding rationing.
Understanding the effects of a price ceiling above or below the market equilibrium price.
Understanding the effects of a price ceiling in the short and in the long term.
Understanding how war afects agricultural labour supply, food production and prices.
Understanding how war affects tax revenue, military expenditure and government budgets.
Understanding alternatives to rationing, such as income taxes or consumption taxes, and the incentives they produce on labour supply.
Understanding the political economy of price controls and rationing.
Presentation videos: