Chapter 1: Problem 1
Does the normal reaction of the price system to a resource shortage provide an example of a positive or a negative feedback loop? Why?
Short Answer
Expert verified
Explain your answer.
Answer: The normal reaction of the price system to a resource shortage is an example of a negative feedback loop. This is because the increased price of the resource due to the shortage triggers a response that counteracts or stabilizes the initial shortage, eventually reducing its severity. The response includes producers increasing production and consumers decreasing consumption or finding alternatives, helping to alleviate the resource shortage.