Buying at a low price in one market and reselling at a higher price in another market will
A) not generate any profit because of transactions costs.
B) not generate any profit because of transportation costs.
C) eventually eliminate all of the price differences.
D) eventually eliminate most, but not necessarily all, of the price differences.
D
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Consider two labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then wage rate will tend to
a. rise in both markets b. fall in both markets c. rise for the union job, but remain unchanged for the nonunion job d. fall for the nonunion job, but remain unchanged for the union job e. rise for the union job and fall for the nonunion job
The free-market system coordinates output decisions by pushing
a. up price when there is a shortage. b. down price when quantity demanded exceeds quantity supplied. c. up price when there is a surplus. d. up price when quantity supplied exceeds quantity demanded.