Im trying to get through some economics questions so im prepared for
my test. The questions posted are the ones I have been having some
trouble with. Please Answer them and include graphs wherever they
would be helpful in explaining the question proposed.

I need an answer by 4/7 at 3:30-4:00PM... please leave a message here
if you have any questions, and tell me if the amount the question is
priced at needs revision. Thanks!

QUESTION:
In the US, we used to look at the old Soviet Union, where bread cost 5
cents/loaf and everyone could afford it but you had to stand in line 6
hours to buy a loaf, and say how terrible.  In the old Soviet Union,
they looked at the US, where bread cost $1/loaf and you didn?t have to
stand in line to buy it but 10% of the population couldn?t afford to
buy bread, and say how terrible.  Using a simple supply and demand
framework, analyze the respective situations.  Who was right?  Which
situation was worse?  Explain how you came to your conclusion.

In the case of the United States, the bread price of one dollar was
sufficiently high enough to encourage producers to supply a great deal
of bread, making it easily available to the populace.  In contrast,
the bread price in the Soviet Union was so low that producers lacked
incentive to produce very much bread and would prefer to devote their
production capacity to more profitable items.  The higher price of
bread in United States keeps demand in check so that shortages did not
occur, whereas the much lower price and the Soviet Union created much
more demand than producers were willing to satisfy.

Although some people in United States were not able to afford bread,
they were assured that if they generated sufficient income, they would
be able to buy bread.  Therefore, they had an incentive to work harder
and did not have to waste time waiting in line.  In contrast, no
matter how much money they had, people in the Soviet Union had no
guarantee that they would be able to buy bread on a particular day. 
As a result, they had much less incentive to work harder to earn more
money, and the amount of time available for productive work was less
because of having to wait in line to buy things.

Because of the incentive to work harder and the ease with which one
could purchase items in United States, the economy of the United
States was much more productive and maximized the overall utility of
the population much more so than that of the Soviet Union.  In
addition, government transfer payments in United States such as food
stamps and welfare, along with private food banks, greatly limit the
adverse effects of allowing the market to establish the price of
bread.  Because the overall society was more productive and more
people were satisfied through enjoying a higher standard of living, I
believe the situation in United States was vastly preferable to that
in the Soviet Union.

Sincerely,

Wonko

I will just comment.

I'll take the Soviet Union situation since at least you can surely get
food. The real problem is all the hours lost that could've been used
for more productive things.