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Chapter 4: Q. d (page 83)

Why do you suppose that the Venezuelan government has begun to provide individuals with coupons giving them the right to purchase only strictly limited quantities of flour, milk, and toilet paper?

Short Answer

Expert verified

Quantity restrictions to ensure effective allocation.

Step by step solution

01

Step1. Given information

Venezuelan government has begun to provide individuals with coupons giving them the right to purchase only strictly limited quantities of flour, milk, and toilet paper.

02

Step2. Explanation

Quantity restrictions are imposed to control the reckless use of resources which leads to wastage. To ensure efficient allocation in terms of restrictions such that all, roughly get the resources that they need, such quantitative restrictions are imposed. Else, there would be irrational use of scarce resources which would lead to wastage.

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