Answer to Question #9129 in Macroeconomics for mike

Question

Discuss in detail one non-price techniques of allocation that the government could introduce in attempt to achieve equity (fairness) and one for administrative efficiency in the now regulated market

Answer 1

One of the non-price techniques of allocation which the government could introduce in attempt to achieve fairness is introduce non-price remuneration, benefits and supporting. This steps may lead to raise a competitions in the areas where its will be introduced. Increasing a competition allow to achieve permanent of market, market equilibrium at the new, lower level and maintain the fairness in the competitive market
& One method for administrative efficiency is a regulation of rates of return and costs. This method allows controlling all returns and costs and maintains it on the minimum required level. Rigid regulation may lead to high level of regulating of economy and to high level of government intervention in the economy and all kind of market.& Hard regulation allows achieving good results and balanced budget but only in short-run period. In long-run period a lot of disproportion and weaknesses of this system will appear.