Assuming Zero Transactions Costs, If Your Local Grocer Buys Oranges

question 231

Multiple Choice

Assuming zero transactions costs, 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:

Entitativity

The perception or degree to which a group is seen as a coherent, unified entity.

Coherent

Characterized by a logical, consistent, and orderly connection of parts, making them understandable and clear.

Drive Theory

Zajonc’s theory that the physical presence of members of the same species instinctively causes arousal that motivates performance of habitual behaviour patterns.

Social Facilitation

The phenomenon that people perform tasks better or more efficiently in the presence of others than when alone.