Author Question: If the price of Big Mac is 3.61 in the U.S. and 3.405 in France, and PPP holds, what is the value ... (Read 35 times)

crobinson2013 · **on:** Jun 30, 2018

If the price of Big Mac is 3.61 in the U.S. and 3.405 in France, and PPP holds, what is the value of the euro in dollars that is implied by The Economist magazine's Big Mac index?

A) 1.060
B) 0.943
C) 1.943
D) None of the above.

Question 2

Refer to the figure above. If A forms a customs union with C, A's welfare will change by

A) a + e
B) a + b + c + d + e
C) a + e - b - c - d
D) a + e - h - i - j