Use the Table for the Question(s)below

question 83

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:

Adult Cigarette

A roll of tobacco designed for smoking, primarily used by adults, associated with various health risks, including lung cancer, cardiovascular diseases, and respiratory disorders.

Efficiency

The ability to accomplish a task with the least waste of time and effort.

Effectiveness

The degree to which a procedure, when used under usual or everyday conditions, achieves the intended effect or results, distinguishing it from efficacy, which is measured under idealized conditions.

Efficacy

The ability to produce a desired or intended result.