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A Bushel of Apples Costs $15

question 64

Essay

A bushel of apples costs $15.00 in the U.S. The same apples cost 1,600 yen in Japan. If the exchange rate is 80 yen per dollar, is there a possibility for arbitrage? Explain and defend your answer. As part of your defense, find the real exchange rate.


Definitions:

Negative Sanctions

Penalties or punishments imposed on individuals or groups to discourage nonconformity to societal norms or laws, ranging from informal disapproval to formal legal penalties.

Gesturing

The use of physical movements and signs, often made with the hands or body, to convey messages or express thoughts without using words.

Mores

Norms that carry great moral significance, are closely related to the core values of a cultural group, and often involve severe repercussions for violators.

Law

A system of rules created and enforced through social or governmental institutions to regulate behavior, with its precise definition being a matter of longstanding debate among specialists.

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