Exploring Non-Price Rationing

2. In the late 1970s, gasoline prices were rising rapidly and there was considerable public support for proposals to set a price ceiling and issue ration coupons. Supporters of rationing wanted to ration gasoline on the basis of "need," but were not in agreement on how need could be measured for the actual distribution of coupons. Some bases for distribution include the number of cars a household has, the number of licensed drivers a household has, equally to all households or persons, and the number of miles each household must drive to work. Explain why some people would consider each of these bases unfair. Can you think of a method that you believe is clearly superior to any of the above methods?

3. Search Google news for the topic "water rights." Can you find any interesting conflicts over water that are in the news? (It is likely that you will because many states have laws that make no sense either from a hydrologic or economic point of view. As a result, conflicts and confusion are inevitable.) (Comment: A whole economics course could be developed around the issue of water rights.)

4. There are a number of places in which our society does not allow a market to function. There is no legal market for babies, for example (although there are markets for sperm, eggs, and wombs for rent). Markets for transplantable organs are also not legal. You cannot, for example, sell a kidney on eBay. What would be the advantage of allowing markets to function freely in these areas? On the other hand, what is the case for prohibiting these markets from forming?

You may learn more about the market for human organs on the internet. Search for "organ trafficking" in both the web and in news. Where do the markets for human organs seem most active? How widespread are they? Can you find the current market value of a kidney?

(The web site marginalrevolution.com likes to find strange markets. Visit it and see if they have found anything strange lately.)

5. In a review of Michael Moore's film Sicko, David Gratzer wrote: [A] recent government survey found that only half of the patients in Ontario hospitals received treatment in a timely manner. Indeed, wait lists and shortages plague practically every aspect of Canadian health care…. When Moore was challenged on this, he told an interviewer: "Well, okay, let's set up a system where we don't have the Canadian wait."

Source: <http://www.city-journal.org/html/rev2007-06-29dg.html>; retrieved July 2, 2007

How could one get the free medical care that a system like Canada provides but not have the waiting times for medical care?

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