Question

With countless people competing for the same resources (think about tennis racquet manufacturers and car manufacturers both wanting graphite), how do we determine who gets the resources? Compare and contrast the results that you would expect from allowing flexible prices to determine who gets the resources with the expected results from using an all-knowing, all-powerful planner and with the expected results from using a not-all-knowing, not-all-powerful planner.

Answer 1

Fair resource division is a timeless problem

Whether dividing an apartment, sharing a cake or resolving a border dispute, the issues are the same. Resource division has been the economic problem.

When we focus on how societies deal with producing and distributing limited resources, we always identify three basic economic problems :

1. What to produce ?

2. How to produce ?

3. Who gets the Income ?

Investigating the allocation of resources, we could look at fairness in distribution.

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