Answer to Question #207414 in Microeconomics for khaled

Question

Definition of rationing and signaling.

Answer 1

Rationing tends to be the act of controlling service or Good's distribution so as to cope up with scarcity. It is normally considered in response to trade restrictions, harsh weather conditions as well as during wars.

Signaling

It is when someone within the market having information, which other people do not have, triggers the buying or selling character of the ones not having information based on the insider's action.