Immediately after an ice storm brought down power lines throughout the region, h

Question

Immediately after an ice storm brought down power lines throughout the region, hardware stores were sold out of batteries and flashlights. However, within a couple of days, special deliveries brought in extra batteries and flashlights, and everyone who wanted to buy a flashlight or batteries was able to do so.

Which of the following principles of economic interaction best describes this scenario?

a. There are gains from trade.

b. Markets allocate goods effectively.

c. When markets do not achieve efficiency, government intervention can improve overall welfare.

d. All costs are opportunity costs.

Explanation / Answer

Answer
b. Markets allocate goods effectively
The need of market demand more goods and it is provided, it is a function of the market and that is "market allocates goods effectively".

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.