You Are Watching TV Late One Night and See an Ad

question 57

Short Answer

You are watching TV late one night and see an ad from Ronco for the Dial-o-matic food slicer.You learn that the Dial-o-matic sells for $29.95.But wait,there's more! Ronco is also including in this deal a set of Ginsu steak knives worth $10.95 and another free gift worth $7.95.Assuming that there is a competitive market for Ronco items,at what price must Ronco be selling this three item Dial-o-matic deal to insure the absence of an arbitrage opportunity and uphold the Law of One Price?

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Definitions:

Racial Disparity

Significant differences and inequalities that exist among racial or ethnic groups in various aspects of life such as health, wealth, and education.

Louisiana Purchase

The acquisition of the territory of Louisiana by the United States from France in 1803, significantly expanding the size of the nation.

Mississippi River

The second-longest river in North America, flowing approximately 2,340 miles from its source in Minnesota to the Gulf of Mexico.

Louisiana Purchase

The Louisiana Purchase was a significant land acquisition by the United States from France in 1803, doubling the size of the nation and opening up the continent for westward expansion.