If a Dollar Buys More Rice in the China

question 26

Multiple Choice

If a dollar buys more rice in the China.than in the U.S. ,then

• A)the real exchange rate is greater than 1;a profit might be made by buying rice in the U.S.and selling it in China.
• B)the real exchange rate is greater than 1;a profit might be made by buying rice in China.and selling it in the U.S.
• C)the real exchange rate is less than 1;a profit might be made by buying rice in the U.S.and selling it in China.
• D)the real exchange rate is less than 1;a profit might be made by buying rice in China and selling it in the U.S.

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Definitions:

Second-Degree Price Discrimination

A pricing strategy where prices vary according to quantity demanded or consumption levels, rather than across different consumer types.

Inverse Demand Function

A mathematical representation that expresses price as a function of quantity demanded, illustrating the relationship between the two inversely.

Monopolist

A market participant that is the sole seller of a good or service, thereby controlling its market.

Income

The money received by an individual or entity, typically in exchange for labor or investment.