Determine which economic principle is illustrated by each scenario. The owner of

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 government interventionequilibrimmarket efficiencyspecialization

Explanation / Answer

Scenario 1: Market efficiency
Explanation: Market efficiency refers to the fact the market is capable of allocating resources efficiently.

Scenario 2: Government intervention

Explanation: Here, the government is intervening in the market in the form of regulations.

Scenario 3: Specialization

Explanation: In specialization, people undertake economic activities on the basis of their own expertise and comparative advantages.  

Scenario 4: Equilibrium

Explanation: Because of the higher supply of oranges, the market equilibrium takes place at a lower price.

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