This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: transaction costs: costs associated with gathering information about prices and availability and mobility, or transporting goods, resources, or potential buyers between markets. intermediaries: specialize in reducing uncertainty and cutting the transaction costs of conveying goods from original producers to the final users, often transforming the good to make it more compatible with ultimate users demands. arbitrage: process of buying at a lower price in one market and selling at a higher price in an other, where the arbitrageur knows both prices and price differential exceeds transaction costs. speculation: does not guarantee positive returns; speculators derive income by buying something at a low price and storing it in the hope of selling it later at a higher price. price ceiling: a maximum legal price. black market: an illegal market where price controls are ignored. price floor: aimed at primarily redistributing income; a minimum legal price price control: price controls arise out of the publics wish to buy certain things at a certain...
View Full Document
- Spring '07