7. a. Using the ideas we learned in the "neoclassical model" what would be the best thing to send to an area that has been devastated by a flood or other similar

tragedy? Why?

Neoclassical Model - supply and demands are the driving forces behind production, pricing, and consumption of goods and services.

b. Considering that the world is always characterized by positive transaction costs, why do we seldom send the good you just mentioned to victims of natural

disasters? What do we tend to send instead and why?

c. How might these ideas relate to foreign aid?