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In Economics, when in a society, human needs are greater than the available resources, then the society will face scarcity. If a society faces scarcity, that means that the society has limited resources and it cannot fulfill the need of every people. So it has to choose a rationing device.
What is a Rationing Device?
Rationing device is a way of deciding who gets the available limited resources. This is a very important term in economics. It also affects human choice, behavior, and decision-making.
Based on a rationing device, society will choose who should get the service. There can be many rationing devices for choosing the appropriate person, but the rationing device, most people choose will affect the behavior of society and they will be competing after that rationing device.
An Example
For example, in a country, job applicants are greater than the available job seats. That means we are facing a scarcity of jobs. Then we must agree that we can not give jobs to everyone because we have limited resources. Then we have to choose a rationing device by which we will select the appropriate person. There can be many rationing devices like political connection, looks, knowledge, skill, and honesty. If we choose skill and honesty as rational devices, then the job applicants will be competing to gain more skill and knowledge and to improve their personality like honesty.
Conclusion
Thus our society will be more skill, knowledge, and honesty oriented. If our society is more focused on skill, knowledge, and honesty, the overall culture of our society will be improved significantly.