Differentiate between a socially-optimal price and a fair-returns price
What will be an ideal response?
A price set at the marginal cost of production is referred to as a socially-optimal price. A price set at the average total cost of production is referred to as a fair-returns price.
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Deviations from the perfectly competitive market can lead to
a. inefficiently high production costs. b. higher prices and smaller outputs. c. less efficient resource allocation. d. All of the above are correct.
Tariffs are different from quotas because they
a. increase government revenue. b. increase profits. c. increase the quantity traded. d. place all the burden on foreigners.
The FDIC was created because
A) the Fed kept the required reserve ratio too low. B) banks failed to create money the way the Fed wanted them to. C) people worried about bank failures after World War I, even though very few banks actually failed. D) there were so many bank failures in the 1930s.
The speculative attack on the German mark in 1971 resulted in
A) a large increase in the German monetary base. B) a decline in the value of the mark relative to the dollar. C) a decision to end the floating of the mark against the dollar. D) a large decrease in the German monetary base.