• Card 4 / 53: How might price ceilings on gasoline impede the evacuation of a city in the path of an oncoming hurricane?

    Answer:
    At any given time, gasoline stations in a typical city don't have enough fuel in the underground tanks to withstand a mass exodus of the entire population, with every motorist filling up before leaving town. If the authorities impose price ceilings to prevent "gouging" after the news breaks, the stations will run out of gas before everyone has had a chance to refuel. Consequently some motorists will be stranded on the interstates, impeding traffic flow.

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Interventionism: The Mixed Economy

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Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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