If Pepperoni Pizzas Sell for $10 in Berkeley, California, and £10

question 57

Multiple Choice

If pepperoni pizzas sell for $10 in Berkeley, California, and £10 in London, England, and the exchange rate is $1.35 = £1,

• A)the law of one price has been violated.
• B)either the British government or the American government must be interfering with the market determination of the exchange rate.
• C)the value of the dollar versus the pound is likely to rise.
• D)there is no contradiction in the information given because pizza is not a tradeable good.

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Definitions:

Genetic Dispositions

Inherited tendencies or vulnerabilities to exhibit traits or behaviors, including susceptibility to diseases.

Positive Reinforcement

A technique used in behavior modification that involves rewarding a desired behavior in order to increase the likelihood of its recurrence.

Negative Reinforcement

A behavioral principle where the removal of an unfavorable event or outcome after the display of a behavior increases the likelihood of that behavior being repeated in the future.

Latent Learning

Learning that occurs without any obvious reinforcement or immediate demonstration of the learned behavior.