According to the Law of One Price, If the Exchange

question 1

Multiple Choice

According to the law of one price, if the exchange rate between the British pound and the dollar is £1 = $1.50, a shirt that retails for $120 in New York should sell for ________ in London.

• A) £180
• B) £50
• C) £60
• D) £80

---

Definitions:

Manufacturing Plant

A facility where raw materials are transformed into finished products through various processes and machinery, typically involving assembly lines and specialized equipment.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping due to the law of demand.

Cost Function

A mathematical relationship that describes how the costs incurred by a company vary with the level of output or production.

Cartel Arrangement

An agreement among competing firms in the same industry to control prices, limit output, or divide markets, in order to maximize profits collectively.