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Illustration of arbitrage

The illustration of arbitrage takes place when: (1) Enterprising students purchase used textbooks much cheaply on E-Bay and sell them to another students at lower prices than bookstore charges. (2) Ivan purchases a stock when it is cheap and sells it after the price increases. (3) Your family purchases in bulk at Sam’s Club rather than shopping at a grocery store. (4) Puerto Ricans and Hawaiians, correspondingly, exchange rum for pineapples therefore both can produce cheaper pina coladas. (5) Students and senior citizens reimburse reduced price for movie tickets at crowded theaters.

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