All economic questions arise from the fact that resources are scarce

In an attempt to maintain the peso exchange rate in 1994, the Mexican central bank

A) purchased dollars and sold pesos. B) sold both dollars and pesos. C) sold dollars and purchased pesos. D) purchased both dollars and pesos.

A student wrote: "A subsidy raises marginal social benefit above marginal social cost and eliminates the deadweight loss from underproduction." If you were the instructor, how would you correct this statement?

What will be an ideal response?