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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:

Distal Tubule

A portion of kidney nephron between the loop of Henle and collecting duct system that plays a crucial role in the reabsorption of water, sodium, and calcium and in the secretion of potassium and hydrogen ions.

Ureter

One of two tubes that carries urine from a kidney to the bladder.

Bowman's Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney, which encases the glomerulus and is involved in the filtration of blood.

Ammonia

A colorless gas with a penetrating odor, NH3, which is a byproduct of nitrogenous waste in organisms and used in various industrial processes.

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