Under what circumstances will the law of one price hold, and when might it not hold?
What will be an ideal response?
When arbitrage can easily occur and transactions costs are zero, the law of one price will hold, but if transactions costs are not zero, the law of one price may not hold.
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In the United States, the federal minimum wage in early 2016was:
A. $7.25 per hour. B. $6.50 per hour. C. $8.00 per hour. D. $7.73 per hour.
If the marginal propensity to save (MPS) is 0.50, the value of the spending multiplier is:
a. 1. b. 2. c. 4. d. 9.
Which of the following is a characteristic of a monopoly?
a. rising average total costs b. one buyer c. rising fixed costs d. a product without close substitutes
Recall the Application about the supply of shipping services to answer the following question(s).Recall the Application. The reason why the short-run supply curve for cargo is upward sloping is that its:
A. marginal cost is upward sloping. B. market demand curve is upward sloping. C. average fixed cost is upward sloping. D. All of these are correct.