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NISA [10]
3 years ago
8

PURCHASING POWER PARITY In the spot market, 19.1 Mexican pesos can be exchanged for 1 U.S. dollar. A compact disc costs $15 in t

he United States. If purchasing power parity (PPP) holds, what should be the price of the same disc in Mexico
Business
1 answer:
LiRa [457]3 years ago
8 0

Answer: $286.50

Explanation:

Purchasing Power Parity (PPP) posits that prices are the same across countries given the rate of exchange between the currencies of the countries in question.

1 USD = 19.1 Mexican pesos.

Compact disc in Mexico would cost;

= 19.1 * 15

= $286.50

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Explanation:

<u>A). More people begin to prefer apples to oranges.</u>

Should peoples' preference change to apples, the demand for oranges will decrease while that of apples will increase. The demand curve is downward sloping. If demand increases, the demand curve will shift to the right. It is also referred to as moving outwards. In this case, the demand curve for apples will shift to the right.

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