Why Do Economists Consider Price-Gougers to be Hurricane Heros? https://www.yout

Question

Why Do Economists Consider Price-Gougers to be Hurricane Heros?

https://www.youtube.com/watch?v=R6ojYtKazgQ - Is Price-Gouging Evil?

https://www.youtube.com/watch?v=h9QEkw6_O6w&t=2s - Is Price-Gouging Immoral?

Instructions:

1. Watch the two film clips, "Is Price-Gouging Immoral?" and "Is Price-Gouging Evil?"

2. Explain why many economists consider price-gougers to be "hurricane heros..."

3. What are the arguments against price-gouging?

4. What do you think about it? Be sure to use economic reasoning in your response, and please try to be brief and concise .

Explanation / Answer

They are "heroes" because their actions relieve the market of shortages of essential goods after a hurricane. Their actions enable people who value (need) the essential goods the most to acquire them, and also help prevent hoarding. Price-gougers keep the market functioning for everyone after a hurricane. The best example of a "hurricane hero" is John Jefferson in the Stoessel film, who was arrested by the Mississippi State Police for selling generators at double the price after a hurricane. According to Stoessel, Mr. Jefferson should have received a medal for putting his money at risk to serve others.

There are no economic arguments against price-gouging. The arguments against price-gouging are "moral" and appeal to the worst in human nature, i.e., "greed." It is politically popular to be against price-gouging, since raising prices after a hurricane prevents "victims from being exploited in a time of need".

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