The Law of One Price Works Under Some Assumptions

question 63

Multiple Choice

The law of one price works under some assumptions. Which of the following is NOT an assumption for the law of one price?

• A) There is free competition.
• B) There is no transportation cost.
• C) There are no tariffs.
• D) The skill level of workers is identical in both countries.

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Definitions:

Personal

Pertaining to or affecting a particular person rather than anyone else, often with regard to individual privacy or personal identity.

Efficacy Expectation

A feeling that one can or cannot execute a particular behavior.

Situational Contrast

Situational Contrast refers to the change in perception or response due to differences in previous or simultaneous conditions or environments.

Ideation Control

The process of managing thoughts and ideas, often with the aim of suppressing or encouraging certain types of thoughts.