, and the auctioneer achieves a price that is within an acceptable range for both parties. except when he doesn ’ t. as you know, it often happens that an auction item fails to reach the reserve price, so this is not a complete answer to the question of the fair value. the auction is also not objective. the result depends on who attends, where and when it is held, the skill of the auctioneer, and many other factors. similar items may fetch widely different prices at different auctions. an alternative economic approach to determining fair value is to establish the cost of the item to be traded, and a fair profit for the trader. this approach is of limited applicability in practice, because the cost of bringing items to market is information which is seldom available to all parties at the time of the trade, and the notion of a “ normal ” profit is completely arbitrary. as the hearings on public utility prices which the ftc and its predecessor has conducted in the past four decades would by now have demonstrated, there are so many discretionary factors which go into the pricing decision that there is no single unambiguous cost of producing anything. the problem is especially intractable when we ’ re talking about services, such as airline transportation, hotel accommodation, legal services, banking and educational services, to cite just a few random examples. economics has made many attempts to make either of these two basic approaches – cost plus and the equilibrium of demand and supply – a better match with our everyday transactions in the real world. this is not the occasion to go into detail, but it is fair to summarise by saying that no convincing model has emerged that would adequately provide a fair value in the circumstances of the examples with which we began, or in many other instances that might be cited. the most important element in determining values in practice is what actually obtains elsewhere in the market, for all goods and services and in all markets. whatever it is you may be selling or buying, your benchmark for determining what is a fair price is the price of comparable products or services. if you are buying or selling a 3 bedroom, 2 bathroom house, you feel satisfied with your settlement price if the value is roughly what similar homes have sold for in the neighbourhood in recent times. if you are opening a hairdressing business, you will price your services on the basis of what others in the profession are charging. the prices of banks beer, carib and heineken are not

speech by governor kganyago on the occasion of the announcement of the winners of the monetary policy committee ( mpc ) schools challenge 17 august 2018 programme director, honourable minister of basic education, ms angie motshekga, deputy governors, heads of department, guest speaker, aisha pandor, colleagues from the south african reserve bank and the department of basic education, parents, representatives from schools, distinguished guests, ladies and gentlemen i am honoured to be standing here this afternoon as we pay tribute to some of the most outstanding economics learners in the country. the monetary policy committee ( mpc ) schools challenge was launched as a pilot programme in 2012 by the south african reserve bank ( sarb ) in conjunction with the gauteng department of basic education ( dbe ). the challenge is a competition for grade 12 economics learners, which exposes them to how the mpc sets the repurchase ( repo ) rate. it also aims to increase the level of interest in economics as a subject of choice among high school learners, and to encourage learners to pursue a career in economics. the sarb has since expanded the challenge to other provinces, as follows : in 2014, to limpopo province ; in 2015, to the free state province ; in 2016, to mpumalanga province ; and in 2017, to the eastern cape, north west and northern cape provinces. today is a major milestone in the history of the mpc schools challenge. this is the first time that schools from all nine provinces have participated in the challenge. in july 2017, the minister of basic education, ms angie motshekga and i launched the national roll - out of this challenge at a media conference here at the sarb where it was announced that the kwazulu - natal and western cape provinces would be participating in the challenge from 2018, effectively opening the challenge to schools in all nine provinces for the first time. the number of participating schools has since risen from 70 ( seventy ) in 2012 to 813 ( eight hundred and thirteen ) in 2018 – impacting 3 212 ( three thousand two hundred and twelve ) learners. the sarb believes the competition will raise the level of understanding of monetary policy, and contribute directly and indirectly to broad public economic education. the students who participate in the mpc schools challenge will also have a better understanding of the role of the sarb. at the onset, we must commend our school finalists ( in alphabetical order ) : empucu