chapter  6
Rationing and price control
Pages 11

This short chapter reports on a result that stems from the canonical indifference-curve apparatus of classroom microeconomics. You will find this material (the apparatus; not my application of it) in any introductory textbook in microeconomics, usually in an appendix to the chapter on the theory of the consumer. (By the way, it is amazing how basically similar the huge variety of commercial economics texts are!) I remember seeing, as a student in the 1960s, a formal “proof” of a “theorem”: rationing – setting an administrative/legal upper limit to the amount of a certain good that can be purchased and acquired for consumption by a single consumption unit (individual, household), in a given period of time – may lower the level of well-being (“utility”) attained by the consumer, or leave that level unaffected, but it can never increase it. In short, with reference to the comparison situation of the “free market,” rationing can only hurt; it can never help.