If the Price of a Hot Dog Is $2 and the Price

question 115

Multiple Choice

If the price of a hot dog is $2 and the price of a hamburger is $4, then the

• A) relative price of a hot dog is 1/2 of a hamburger per hot dog.
• B) money price of a hot dog is 2 hamburgers per hot dog.
• C) relative price of a hamburger is 1/2 of a hot dog per hamburger.
• D) money price of a hamburger is 2 hot dogs per hamburger.

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Definitions:

Incentives

Rewards or motivations offered to encourage specific behaviors or actions by individuals or organizations.

Price Discrimination

The strategy of selling the same product at different prices to different groups of consumers, based on willingness to pay.

Discount Retailers

Stores that offer products at lower prices by accepting lower margins in return for a high sales volume.

Arbitrage

The practice of taking advantage of price differences between markets to make a profit.