What Is the Exchange Rate Between the Dollar and the British

question 47

Multiple Choice

What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 60 dollars in New York and 30 Pounds in London?

• A) 1.5 dollars per British pound
• B) 0.5 dollars per British pound
• C) 2.5 dollars per British pound
• D) 3.5 dollars per British pound
• E) 2 dollars per British pound

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Definitions:

Price Ceiling

A government-imposed limit on the price charged for a product, intended to prevent prices from rising too high.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, often due to market prices being higher.

Substitutes

Goods or services that can be used in place of each other, allowing consumers to switch if there is a change in price or availability.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive due to market dynamics.