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? 1. When markets do not achieve efficiency, government intervention can improve overall welfare. 2. Markets allocate goods effectively. 3. All costs are opportunity costs. 4. There are gains from trade.
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? 1. When markets do not achieve efficiency, government intervention can improve overall welfare. 2. Markets allocate goods effectively. 3. All costs are opportunity costs. 4. There are gains from trade.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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?
1. When markets do not achieve efficiency, government intervention can improve overall welfare.
2. Markets allocate goods effectively.
3. All costs are opportunity costs.
4. There are gains from trade.
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