The Undercover Economist highlights the importance of price as rationing mechanism, especially in times of shortage. I think this is a particularly interesting example because the seller specifically says that the reason he raised prices was to get people to stop panic-buying and it's pretty clear that the alternative was a physical shortage, leaving some buyers completely out in the cold. As I was reading this, it did occur to me that one upside of today's crazy gas prices is that, as an economics teacher, it allows me to talk about the gas shortages of the 1970's without sounding like I'm just old!
Welcome new readers!
The "New to the blog? Start here" page will give you an overview of the blog and point you to some posts you might be interested in. You can also subscribe to receive future posts via RSS, Facebook or Twitter using the links on the right-hand side of the page, or via email by entering your address in the box. Thanks for reading!