According to the law of one price, identical products should sell for the same price everywhere if
A) transactions costs are zero.
B) consumers have knowledge of the prices charged for products in different markets.
C) there are no tariffs or other restrictions on imports or exports.
D) firms can prevent consumers from engaging in arbitrage.
A
You might also like to view...
The more firms are present in a market, the:
A. more competition is likely to be present. B. less competition is likely to be present. C. more like a monopoly it will behave. D. more collusion is likely to occur.
The merchandise trade balance
a. reflects trade in intangibles like insurance and tourism b. includes personal gifts to friends abroad c. records the flow of financial assets like stocks and bonds d. equals the value of imports minus the value of exports e. equals the value of tangible products exported minus the value of tangible products imported
A U-shaped long-run average cost curve implies that a firm faces only diseconomies of scale.
Answer the following statement true (T) or false (F)
Consider the market for meekers in the imaginary economy of Meekertown. In the absence of international trade, the domestic price of a meeker is $30. Suppose that the world price for a meeker is $40. Assume that Meekertown is too small to influence the world price for meekers once they enter the international market.
1.If Meekertown allows free trade, then it will ___________ meekers. 2. Given current economic conditions in Meekertown, complete the following table by indicating whether each of the statements is true or false. 3. Meekertownian consumers were worse off without free trade than they are with it. 4. Meekertownian producers were better off without free trade than they are with it. 5. When a country is too small to affect the world price, allowing free trade will always decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade. True False