Assuming Zero Transaction Cost, If Your Local Grocer Buys Oranges

question 246

Multiple Choice

Assuming zero transaction cost, if your local grocer buys oranges at a low price from an orchard and resells them to you at a higher price, then the grocer's revenue minus costs is known as

• A) arbitrage profits.
• B) transactions profits.
• C) pure profits.
• D) excess profits.

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Definitions:

Functional Fixedness

A problem-solving phenomenon in which people have difficulty in seeing alternate uses for common objects.

String Problem

A type of problem-solving task that involves finding solutions or patterns within sequences of characters or symbols.

Pendulum

A weight suspended from a pivot so that it can swing freely, often used in clocks for regulating time.

Critical Thinking

A type of thinking that involves careful examination of assumptions and evidence and that is purposeful and deliberate.