If a lobster in Maine costs $10 and that the same type of lobster in Massachusetts costs $30, then people could make a profit by
a. buying lobsters in Maine and selling them in Massachusetts. This action would increase the price of lobster in Massachusetts.
b. buying lobsters in Maine and selling them in Massachusetts. This action would decrease the price of lobster in Massachusetts.
c. buying lobsters in Massachusetts and selling them in Maine. This action would increase the price of lobster in Massachusetts.
d. buying lobsters in Massachusetts and selling them in Maine. This action would decrease the price of lobster in Massachusetts.
b
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In the long run, firms in monopolistic competition earn zero economic profit because
A) firms are free to enter and exit. B) their products are similar but slightly different. C) of over-reliance on product marketing. D) of collusion among the various sellers. E) their demand curves are horizontal.
Sarah and Diane are both billing clerks for the local trucking company earning $17,000 per year. Sarah is attending college, plans to graduate in one year and earn $55,000 as an economist
Diane is not in college or undergoing any specialized training and will have the same job next year. According to economic theory, which of the two individuals would tend to have a higher current savings rate? A) Diane B) Sarah C) Both will have the same saving rate. D) Economic theory sheds no light on this question.
The idea of opportunity cost suggests that the cost of a particular choice should be measured by the
a. price of the good chosen b. price of the good divided by income c. value of the best alternative sacrificed d. amount of the good consumed e. sum of the costs of all foregone opportunities
A government subsidy is typically used
A. to reduce inflation. B. to provide a government-inhibited good. C. to correct a positive externality. D. to correct a negative externality.