Question

One reason for the economic shut-down ordered by the government was

	A.	Government control of individuals
	B.	Reallocation of scarce resources
	C.	Redistribute abundant resources
	D.	Spike unemployment

If demand spikes for a particular item it is because

	A.	people want to stock up now to resell later
	B.	The coronavirsus caused a shortage in toilet paper.
	C.	people may be afraid of shortages
	D.	The demand curve shifted left, leaving people without toilet paper

Answer 1

Answer-1. Correct option is 'B'

One reason for the economic shut-down ordered by the government was reallocation of scarce resources. The problem of reallocation arise due to scarcity of resources and refers to the question, what to produce and how much to produce.

Answer-2. Correct option is 'C'

If demand spikes for a particular item it is because people may be afraid of shortages. If a buyer expects the price to go up in the future or shortage of the good in the future, the demand for the good today increases.