When People Engage in Arbitrage, They Are Trying To

question 47

Multiple Choice

When people engage in arbitrage, they are trying to:

• A) add value to an asset by changing its basic features.
• B) profit from buying an asset, waiting for it to appreciate, and then selling it.
• C) reverse a price decline by manipulating the demand for a product.
• D) profit from different buying and selling prices for similar assets in the same time period.

Identify the fundamental roles of government in safeguarding private property and enforcing contracts.

Understand the production and overproduction of external benefits in a free market system.

Distinguish between public goods, private goods, and the characteristics of each.

Define and identify external benefits and their impact on third parties.

---

Definitions:

Pleasure

A feeling of happiness or satisfaction that comes from the enjoyment of experiences or activities.

Jeremy Bentham

An English philosopher, jurist, and social reformer regarded as the founder of modern utilitarianism.

Consequences

The outcomes, effects, or results that naturally or logically follow from an action or condition.

Epicurus

An ancient Greek philosopher who founded Epicureanism, a philosophy advocating for simplicity and seeking pleasure through the avoidance of pain as the key to happiness.