Which of the following does not represent an arbitrage transaction?
A. Traders buy silks where they are abundant and cheap, and haul them along a trail to another place where they would be quite scarce and valued.
B. An investor buys a stock when the company is new and relatively unknown and then sells the stock for a much higher price when the company is well-known and profitable.
C. Someone buys a block of Final Four tickets and scalp them at the game.
D. A boat manufacturer buys the electrical components for its boats from the lowest cost supplier and then sells the boats to consumers.
Answer: D
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Producer surplus
A. is the difference between the minimum price producers are willing to accept for a product and the higher equilibrium price. B. is the difference between the maximum price consumers are willing to pay for a product and the lower equilibrium price. C. rises as equilibrium price falls. D. is the difference between the maximum price consumers are willing to pay for a product and the minimum price producers are willing to accept.
If a country's population increases while the supply of farmland is fixed, then farmland prices will most likely
a. decrease because people spend more money on food and have less to spend on rent b. increase because the marginal revenue product of food decreases c. decrease because farmers must cultivate less productive foods such as potatoes d. increase because the marginal revenue product of land increases e. stay the same because there is no relation between farm land prices and population
If a country allows free trade and its domestic price for a given good is lower than the world price, then it will import that good
a. True b. False Indicate whether the statement is true or false
The median voter model could most accurately be described by the phrase ______.
a. “the squeaky wheel gets the grease” b. “choose the road less taken” c. “one day at a time” d. “keep it in the middle of the road”