A government system that allows only small amounts of certain goods to be bought by each consumer is known as:

• A. Rationing
• B. Subsidy
• C. Price ceiling
• D. Black market

Answer: (A)

Verified step by step guidance

1. Understand the concept of rationing: it is a government-imposed system that limits the quantity of certain goods that each consumer can purchase, often used during shortages or emergencies.
2. Recognize that a subsidy is a financial aid provided by the government to reduce the cost of production or consumption, which does not limit quantities but rather affects prices.
3. Know that a price ceiling is a legal maximum price set by the government to prevent prices from rising above a certain level, but it does not directly limit the quantity each consumer can buy.
4. Identify that a black market is an illegal market where goods are traded without government regulation, often arising when rationing or price controls are in place.
5. Conclude that the system described, which restricts the amount of goods each consumer can buy, matches the definition of rationing.