Final answer:
Hoarding of essential goods is a value-laden act that can exacerbate shortages and inflation. The example of Israel's high inflation in 1985 illustrates market confusion caused by unstable prices. Retailers and producers should promote fair distribution to stabilize prices.
Step-by-step explanation:
Hoarding of essential goods in a situation of excess demand is indeed a value-laden act. It represents a decision that impacts not only the individual who is hoarding but also the broader community that might be in need of those goods. Such behavior can exacerbate shortages and contribute to inflation, as it reduces the available supply in the market, leading to higher prices for everyone.
When inflation is high and variable, as in the example of Israel in 1985, the price signals which guide economic decisions become less reliable. This uncertainty can lead to erratic market behaviors — buyers might be confused whether price increases are due to genuine supply and demand changes or simply due to inflation. Sellers might react by increasing production unnecessarily or might not respond to real changes in demand due to the misinterpretation of price signals.
Retailers and producers, as global citizens, should focus on promoting fair distribution and ensuring adequate supply to manage inflationary pressures and avoid the creation of artificial scarcity through hoarding. This would help in stabilizing prices and maintaining access to essential goods for all consumers.