If the Price of a Burger Is $2

question 118

Multiple Choice

If the price of a burger is $2.90 Canadian in Toronto and $3 U.S. in New York, and if purchasing power parity holds, then the exchange rate is

• A)$1 U.S. per Canadian dollar.
• B)$3 U.S. per Canadian dollar.
• C)97 cents U.S. per Canadian dollar.
• D)103 cents U.S. per Canadian dollar.
• E)none of the above.

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Definitions:

Opportunity Costs

The financial sacrifice made by not selecting the alternative that ranks immediately lower when faced with a decision.

Cars

Wheeled motor vehicles used for transportation, typically powered by an internal combustion engine or electric motors.

Computers

Electronic devices capable of processing, storing, and displaying information, used for a wide range of applications from personal computing to complex scientific calculations.

Opportunity Cost

The charge of overlooking the next most beneficial alternative while making a choice.