Use the Table for the Question(s) Below

question 15

Multiple Choice

Use the table for the question(s) below.
Consider the following prices from a McDonald's Restaurant:

-A McDonald's Big Mac value meal consists of a Big Mac Sandwich,Large Coke,and a Large Fry.Assuming that there is a competitive market for McDonald's food items,at what price must a Big Mac value meal sell to insure the absence of an arbitrage opportunity and uphold the law of one price?

• A) $4.08
• B) $4.38
• C) $5.47
• D) $5.77

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Definitions:

Contrapositive

A logical statement obtained by negating and swapping the hypothesis and conclusion of a conditional statement.

Proposition

A statement or assertion that expresses a judgment or opinion; in logic, it is a declarative sentence that is either true or false.

Relationship

How two or more notions, entities, or persons have a bond between them, or the existence of such a bond.

Contradictories

Statements or propositions that are in direct opposition to each other, such that if one is true, the other must be false.