Th1.2: Price Mechanism in Global Markets Flashcards
1
Q
What is a global example of a rationing function?
A
OPEC proclaiming an oil embargo in 1973 (restricted oil supply)
2
Q
How did the OPEC’s announcement result in the rationing function?
A
the disequilibrium of supply and demand meant high prices deterred consumers who didn’t value oil highly, restoring the equilibrium
