Question

The Applying the Concept feature explains that the Feeding America charity asked three professors at the University of​ Chicago's Booth School of Business to design a more efficient way of allocating food to local food programs and that the professors proposed changing the food allocation system to one that resembled a market.

​Source: Canice​ Prendergast, "The Allocation of Food to Food​ Banks," Working​ Paper, University of​ Chicago, Booth School of​ Business, October​ 11, 2016.

Under the new​ system, the​ "shares" each food program receives to use in bidding for the types of food would be the equivalent to what economic variable that consumers use in the marketplace to bid for goods and​ services?

A.

Bank interest rates.

B.

Market prices.

C.

Consumer income.

D.

Technology.

The amount of shares needed by a food program to get certain types of food would be equivalent to what economic variable in the marketplace for goods and​ services?

A.

Market prices.

B.

Worker wages.

C.

Firm costs.

D.

Firm profits.

One of the University of Chicago professors advising Feeding America notes​ that: "Much of the food that is distributed through food banks often originates with

donorslong dash—large

manufacturers or

distributorslong dash—far

from​ [local food​ bank's] needy​ clients."  

Why might this fact make it more likely that a market mechanism would improve the​ well-being of people receiving food from local food​ banks?

A.

The use of a market mechanism allows donors to take advantage of larger tax deductions.

B.

A market mechanism is better suited to match donations to the locations where recipients receive the most benefit.

C.

A market mechanism is better suited to allocate food in a way that ensures each location will be treated the same.

D.

The use of a market mechanism creates a food allocation system that ensures each recipient receives an equal allotment of food.

Answer 1

Ans 1 Correct Option C which is Consumer Income

Because by income of the consumer , by that the consumer will be able to bid. Money is the main the source of bidding.

Here Bank Rate , Technology and Market Options are incorrect options because it will be not viable here because they do not help in bidding.

Ans 2 Correct Option A which is Market Prices

Market prices will be the variable here to see the prices and orders which will take to fill the order.

Other Options like Worker wages, firm profits and firm cost are incorrect because these all will not act a as a determinant here and is not related to food itself here.

Ans 3 Correct Option B which is A market mechanism is better suited to match donations to the locations where recipients receive the most benefit.

because matching program is a scrip system which is mainly used for allocation of donations of food to food banks. it is a method which was implemented by the medical residency design.

Rest of the Options are incorrect because rest of these options will not give the most benefit to consumers.