Exchange rates are determined by _____________.

a. the presence or absence of trade barriers.

b. banks, labor unions, and non-profit organizations.
c. the relative scarcity of a good or service.
d. market prices of one country's currency in another country's currency (?)

A small town has one pizza place. It charges $15 for a large one-topping pizza. One spring, a new pizza place opens. The original pizza place changes its price. What is most likely the new price?

a. $12 (?)
b. $16
c. $18
d. $20

Yes. Both of your answers are right.

The correct answer to the first question is d. Market prices of one country's currency in another country's currency.

Exchange rates refer to the value of one country's currency relative to another country's currency. These rates are determined by the market forces of supply and demand for different currencies. The relative scarcity of a currency, as well as factors such as interest rates, inflation, political stability, and trade flows, can all influence exchange rates. Market participants, such as currency traders, banks, and institutional investors, are constantly buying and selling currencies, which in turn affects the exchange rate.

Now, let's move on to the second question about the new price of the original pizza place. To determine the most likely new price, we need to consider the information given.

Initially, the original pizza place charges $15 for a large one-topping pizza. However, a new pizza place opens in the same small town, prompting the original pizza place to change its price.

Since the new pizza place has entered the market, the original pizza place is likely to adjust its pricing strategy in response to the competition. It's common for businesses to make changes in prices to attract customers and stay competitive.

Based on this information, it's difficult to determine the exact new price. However, based on common pricing strategies, it is reasonable to assume that the original pizza place might lower its price to maintain its customer base or attract new customers.

Therefore, the most likely answer to the second question is a. $12. However, without additional information, it is still just an educated guess, as the new price could also be influenced by various other factors such as cost considerations or the perception of the pizza's value.