If price were not used as a rationing device, would something else have to be used? If so, what might it be? Suppose that a local movie theatre decided to use something other than price to determine who got to see the latest movies. Devise a rationing device that would be fair to both moviegoers and theater owners.

In economics, when the price isn't used to distribute goods or services, there must be an alternative way to decide who receives the limited resources — this is where alternative rationing methods come into play. These non-price mechanisms include a variety of strategies, each with its benefits and drawbacks.

One well-known method is a lottery system, where chances are randomly assigned to potential consumers, ensuring everyone has an equal opportunity. This can be seen as fair, but it might ignore people's willingness to invest time or effort in obtaining the resource.

Queuing is another common method, where resources are allocated to individuals in the order they arrive or sign up. This system rewards those who are willing to commit time, but can be unfair for people who might not have the opportunity to queue due to other obligations.

Needs-based allocation prioritizes individuals who need the resource the most. For example, emergency medical care is often provided based on the severity of the patient's condition. While morally compelling, determining needs can be complex and subjective.

Each method has consequences for consumer behavior and perceptions of fairness, which should be thoughtfully considered when deciding on an alternative to price-based rationing.

A first-come, first-served policy is straightforward and easy to understand — the first individuals to step forward are the ones who get served. In practice, this means that those eager enough to show up early or get in line ahead of others will secure their spot for a service or product.

For example, in the case of a local movie theater that has decided to disregard pricing as a rationing tool, adopting a first-come, first-served policy could encourage moviegoers to arrive early to guarantee a seat. This could create an exciting atmosphere, as fans compete to be at the front of the line.

However, there are potential pitfalls: this policy can be inefficient if it leads to people waiting for long hours, thus potentially wasting valuable time. There's also an inherent unfairness for those who cannot arrive early due to other responsibilities or those with accessibility issues.

Despite its limitations, the first-come, first-served policy is transparent and can be very fair in circumstances where all interested parties have an equal opportunity to arrive early and wait.

Merit-based distribution systems allocate resources based on performance, talent, or other measures of merit. This system often appears in academic scholarships, awarding funds to students who have demonstrated exceptional abilities or achievements.

The promotion of meritocracy can incentivize individuals to perform better and strive for excellence. In the realm of movie theaters, a merit-based system might allow those who are most knowledgeable about the films, or who contribute to the movie-going community, to receive tickets to new releases.

Challenges with this system can arise in determining the criteria for merit, which can be subjective. It's essential to ensure that the standards for merit are clear, transparent, and communicated effectively.

Moreover, while merit-based systems seek to reward effort and achievement, they can sometimes overlook those with unmeasured talents or individuals who face systemic disadvantages, raising questions about equity and inclusivity.