Which of the following is a liability of the Federal Reserve?

Refer to Figure 5-6. Why is there a deadweight loss?

A) because the marginal private cost for each additional unit between Q1 and Q2 exceeds the marginal private benefit B) because the marginal private benefit for each additional unit between Q1 and Q2 exceeds the marginal cost C) because the marginal social cost for each additional unit between Q1 and Q2 exceeds the marginal social benefit D) because the marginal social benefit for each additional unit between Q1 and Q2 exceeds the marginal cost

Which of the following most accurately states the economic significance of exchange?

a. Physical goods have value because they exist; exchange can neither increase nor decrease their value. b. Production of physical goods creates value; exchange merely redistributes this value. c. Exchange creates value by moving goods from parties who value them less to parties who value them more. d. Exchange reduces value since it consumes resources without adding to the physical supply of goods.