Final answer:
The economic concept illustrated by the unintended consequences of a washing machine energy mandate is externalities, which can lead to market failure and impact production and employment levels.
Step-by-step explanation:
The economic concept best demonstrated by the unintended consequence of the washing machine energy mandate is externalities. Externalities occur when the full social costs or benefits of an economic activity are not reflected in market transactions. This can lead to market failure, where the market output is not efficient because firms and consumers do not bear or receive all the associated costs and benefits.
For instance, without considering the environmental externalities, such as pollution, the price of a good will not reflect its true cost to society, leading to overproduction and potential overconsumption. When social and environmental costs are included, the price increases, potentially reducing consumption and production, which can inadvertently result in unemployment. Thus, externalities demonstrate how government regulations, like energy mandates, can influence market behavior and result in unintended outcomes.