Commentaries on this Media

Seinfeld Economics: The Chinese Restaurant (Bribing Maitre d')

by Linda Ghent

Opportunity cost is the cost of the next-best alternative. The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. It is important to keep in mind that opportunity costs are not restricted to monetary or financial costs.

A rationing mechanism is a system for choosing who gets how many goods during a shortage. Long lines are often used to ration goods in shortage (so the good is distributed on a first-come, first-serve basis). In addition, black markets often develop as a way of rationing goods that are in shortage.