Question

Determine which economic principle is illustrated by each scenario. The owner of a snow cone trailer realizes that the demand for snow cones is low during the winter, and thus, closes shop until the temperature warms back up near summertime. The local river has so much pollution that three-eyed fish are forming. The government responds by regulating the amount of chemicals that can be dumped into the river. At a high-end restaurant, the restaurant owner has one chef at a meat station, one chef at a vegetable station, and one chef, who has an artistic eye, plate the food she is given. The result is increased service speed, and the kitchen is able to serve more customers in an evening. During the summer, a bumper crop of oranges in Florida causes a surplus in the supply of oranges nationwide. As a result, prices fall to compensate for the surplus and consumers enjoy the fruits of the farmers' labor. Answer Bank

Answer 1

The described scenarios illustrate the law of demand, government regulation, division of labor, and the law of supply in various economic contexts, demonstrating the responsiveness of markets to changes and external factors.

Step-by-step explanation:

The scenarios provided illustrate different economic principles:

• The snow cone trailer owner's decision to close shop during winter demonstrates the law of demand, where he recognizes that demand for snow cones decreases as the temperature drops.
• The government's intervention to regulate pollution showcases government regulation influencing market outcomes to protect public health and the environment.
• The high-end restaurant optimizing its staff's skills for efficiency represents the principle of division of labor, which increases productivity and service speed.
• The drop in orange prices due to a bumper crop exemplifies the law of supply, where an increase in supply, if not matched by an increase in demand, typically leads to lower prices.

These scenarios underscore how markets operate under the laws of demand and supply, and how both producers and consumers respond to changes in market conditions, including seasonal variations and government policies.

Answer 2

The correct answer is: market efficiency; government intervention; specialization; equilibrium.

Step-by-step explanation:

The owner of the snow cones realizes that the demand for snow cones has decreased in winter, and thus, closes shop to open back. This is an example of market efficiency.

The local river is being polluted too much because of the huge quantity of chemicals being dumped in the river. The government, as a result, enforces regulation on the quantity of chemicals being dumped. This is an example of government intervention in the economy.

At a restaurant one chef is placed at the vegetable station, one chef is at meat station, and one is to plate the food. This an example of specialization the management is placing chef that specializes in vegetable, meat and in plating at their respective positions. So they can work in the most efficient manner and the service speed increases.

The favorable weather leads to an increase in the supply of oranges. This causes a rightward shift in the supply curve. The price of oranges fall as a result. This is an example of change in equilibrium.