A firm produces an output level at which price is greater than marginal cost. Explain why this is inefficient
What will be an ideal response?
It is inefficient because the value that society places on using these resources to produce this product is greater than the cost of using resources to produce the product.
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The expectation of future revaluation causes a balance of payments crisis marked by
A) a sharp rise in reserves and a fall in the home interest rate below the world interest rate. B) a sharp fall in reserves and an even bigger fall in the home interest rate below the world interest rate. C) a sharp fall in reserves and a rise in the home interest rate above the world interest rate. D) a sharp rise in reserves and an even greater rise in the home interest rate above the world interest. E) a sharp fall in reserves and an unchanged home interest rate.
The National Industrial Recovery Act (1933)
(a) did not permit businesses to set prices and production quotas. (b) established three advisory boards composed of government, Webb-Pomerene firms and members of the Federal Reserve System. (c) was thrown out by the Supreme Court in May 1935. (d) prohibited collective bargaining.