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Issue:

Social Issues

 

Written by:

Robert U

 

Date added:

February 22, 2015

 

Level:

University

 

Grade:

A

 

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6 / 1507

 

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Otherwise, laissez-faire, government should let business pursue its own ends. Most writers agree that these are at least the minimal role for government. One of the bases of Smith's and free market economists' limited government position is the vital function of prices to signal scarcity. High prices ration the use of resources and products and simultaneously encourage the conservation and production of those that are scarce There are a number of negative consequences of government intervention in product markets...
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High prices ration the use of resources and products and simultaneously encourage the conservation and production of those that are scarce There are a number of negative consequences of government intervention in product markets. Pegging, or setting the price below equilibrium (rent control, gasoline, plywood before a hurricane) results in shortages and the additional problem of government rationing (lines and waiting lists!)...
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General issues of this essay:
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