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zar zar
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4 years ago
Recall the Application about the price of Big Macs in China and around the world to answer the following question(s).
The following table is taken from the Application. For several years, The Economist has measured the prices of Big Macs throughout the world and compared the price differences to exchange rates.

Country		Price of a Big Mac in Local CurrencyPrice of a Big Mac in Dollars
United States3.58 dollars3.58
United Kingdom2.30 pounds3.48
China12.50 yuan1.83
Switzerland6.52 Swiss francs6.16
Mexico32.05 pesos2.56
Euro Area3.37 euros4.62


According to the table, the price of Big Macs converted to U.S. dollars varies widely around the world. This shows that Big Macs do NOT follow the

▸ law of demand.

▸ law of one price.

▸ law of opportunity cost.

▸ law of exchange rate parity.
Textbook 
Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
Authors:
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DryPhantomDryPhantom
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#1
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4 years ago
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wrote...
#2
4 years ago
Recall the Application about the price of Big Macs in China and around the world to answer the following question(s).
The following table is taken from the Application. For several years, The Economist has measured the prices of Big Macs throughout the world and compared the price differences to exchange rates.

Country		Price of a Big Mac in Local CurrencyPrice of a Big Mac in Dollars
United States3.58 dollars3.58
United Kingdom2.30 pounds3.48
China12.50 yuan1.83
Switzerland6.52 Swiss francs6.16
Mexico32.05 pesos2.56
Euro Area3.37 euros4.62


According to the table, the price of Big Macs converted to U.S. dollars varies widely around the world. This shows that Big Mac pricing does NOT follow the theory of

▸ Ricardian equivalence.

▸ supply and demand.

▸ real versus nominal prices.

▸ purchasing power parity.
wrote...
#3
4 years ago
purchasing power parity.
wrote...
#4
4 years ago
Recall the Application about the price of Big Macs in China and around the world to answer the following question(s).
The following table is taken from the Application. For several years, The Economist has measured the prices of Big Macs throughout the world and compared the price differences to exchange rates.

Country		Price of a Big Mac in Local CurrencyPrice of a Big Mac in Dollars
United States3.58 dollars3.58
United Kingdom2.30 pounds3.48
China12.50 yuan1.83
Switzerland6.52 Swiss francs6.16
Mexico32.05 pesos2.56
Euro Area3.37 euros4.62


According to the table, when converted to U.S. dollars, Big Macs cost approximately ________ percent more in the United States than they do in China.

▸ 49

▸ 95

▸ 175

▸ 195
wrote...
#5
4 years ago
95
wrote...
#6
4 years ago
Recall the Application about the price of Big Macs in China and around the world to answer the following question(s).
The following table is taken from the Application. For several years, The Economist has measured the prices of Big Macs throughout the world and compared the price differences to exchange rates.

Country		Price of a Big Mac in Local CurrencyPrice of a Big Mac in Dollars
United States3.58 dollars3.58
United Kingdom2.30 pounds3.48
China12.50 yuan1.83
Switzerland6.52 Swiss francs6.16
Mexico32.05 pesos2.56
Euro Area3.37 euros4.62


According to the table, the Big Mac would cost the same in China and the United States at an exchange rate of ________ yuan for every one U.S. dollar.

▸ 1.83

▸ 2.86

▸ 3.49

▸ 12.50
wrote...
#7
4 years ago
3.49
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