A Product Sells for $750 in Canada

question 13

Multiple Choice

A product sells for $750 in Canada.The exchange rate is $1 to 9.55 pesos.If the law of one price holds,what is the price of the product in Mexico?

• A)4,375.00 pesos
• B)5,545.50 pesos
• C)6,750.00 pesos
• D)7,162.50 pesos

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Definitions:

Production Possibilities Curve

The production possibilities curve illustrates the maximum possible output combinations of two goods that an economy can achieve when all resources are fully and efficiently utilized.

Output

The cumulative volume of goods or services yielded by a business, industry, or economic structure.

Production Possibilities Diagram

A graphical representation showing the maximum number of output combinations that an economy can achieve using its resources efficiently.

Inefficiently

Operating in a manner that does not maximize productivity or wastes resources, leading to lower outputs for given inputs.