At the Current Exchange Rate of $1

question 37

Multiple Choice

At the current exchange rate of $1.40 per British pound,a one-day pass to Worldwide Theme Park of Florida sells for 45 pounds at travel agencies throughout Great Britain.If the exchange rate increases to $1.70 per pound,what will happen to the price of a one-day pass sold in Great Britain?

• A)The price will be unchanged.
• B)The price will fall to 37 pounds.
• C)The price will increase to 54 pounds.
• D)The price will fall by 12 pounds.

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Definitions:

Law of Diminishing Returns

A principle stating that as one factor of production is increased while others are held constant, the resulting addition to output will eventually decrease.

Coase Theorem

An economic theory stating that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own.

Director of Housing

A position responsible for overseeing housing programs, policies, and services, typically within a governmental or nonprofit organization.

Marginal Benefit (MB) Curves

Graphs that show the additional benefit received from consuming one more unit of a good or service.