[Related to the Apply the Concept on page 62] The Apply
the Concept feature explains that the Feeding American
charity asked three professors at the University of
Chicago’s Booth School of Business to design a more efficient way of allocating food to local food programs and
that the professors proposed changing the food allocation
system to one that resembled a market.
a. Under the new system, the “shares” each food program receives would be the equivalent to what economic variable that consumers use in the marketplace
to bid for goods and services?
b. The number of shares a food program needs to receive
certain types of food would be equivalent to what economic variable in the marketplace for goods and services?
c. One of the University of Chicago professors advising Feeding America noted, “Much of the food that is
distributed through food banks often originates with
donors—large manufacturers or distributors—far
from [local food bank’s] needy clients.” Why might
this fact make it more likely that a market mechanism
would improve the well-being of people receiving
food from local food banks?