Because of Price Controls in the Former Soviet Union, People

question 116

Multiple Choice

Because of price controls in the former Soviet Union, people often waited in long lines for food and other necessities. Modern economic theory would indicate that, relative to price rationing, waiting in line is

• A) just as efficient.
• B) less efficient because the time spent waiting in line imposes an opportunity cost on the buyer that does not generate revenue for the seller.
• C) more efficient since waiting in line reduces the transaction costs of purchasing goods.
• D) more efficient since waiting in line reduces the cost of the goods to the consumer.

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Definitions:

Retailer-sponsored Cooperative

A group of independent retailers who collectively purchase goods, share marketing efforts, and distribution channels to compete with larger chains effectively.

Service-sponsored Retail System

A retail network established by a service provider to sell or distribute its services directly to consumers.

Administered Cooperative System

A system where a central agency coordinates the activities of a group of cooperative entities, ensuring efficiency and uniformity in operations.

Franchising

A business practice in which a company allows another operator to trade under its brand in return for a fee or license.