Arbitraging Price Differences Between Two Markets Is Generally Not Possible

question 49

Multiple Choice

Arbitraging price differences between two markets is generally not possible if:

• A) there are positive costs of transporting the products from one market to the other.
• B) the transportation costs are larger than the difference in prices.
• C) the government has prohibited exchange between the two markets.
• D) A and C above
• E) B and C above

Distinguish between private and common ownership and its implications on care and conservation of resources.

Appreciate the role of technology and efficient communication in reducing transaction costs and enabling greater volumes of trade.

Understand the economic rationale for specialization and comparative advantage in producing goods and services.

Understand the concept of transaction costs and their impact on market exchanges.

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Definitions:

Neuron

One of billions of nerve cells in the central nervous system, especially in the brain.

Dendrites

The branched extensions of a neuron that receive signals from other neurons.

Sensory System

The part of the nervous system responsible for processing sensory information received from the environment.

Stimulus

Any event or situation that evokes a response from an organism.