Starbucks (Croatia). Starbucks opened its first store in Zagreb, Croatia in October 2010. In Zagreb, the price of a tall vanilla latte is 25.69 Croatian kuna (kn). In New York City, the price of a tall vanilla latte is $2.64. The exchange rate between the Croatian kuna and U.S. dollar is kn5.6288 = $1.00. According to purchasing power parity, is the Croatian kuna overvalued or undervalued? The percentage of overvaluation or undervaluation is 72.88 %. (Round to two decimal places.) According to purchasing power parity, the Croatian kuna is undervalued. (Select from the drop-down menu.)

While shopping in the Mexican market, you find that limes cost 11 pesos each. You remember that back in the U.S., they cost 80 cents each. If the purchasing power parity theory holds, the rate of exchange is A. 13.75 pesos/dollar or 7.3 cents/peso. B. 80 pesos/dollar or 1.25 cents/peso. C. 7.3 pesos/dollar or 13.75 cents/peso. D. 11 pesos/dollar or 0.80 cents/peso.

France can produce either 50 units of cheese or 80 units of wine per labour hour. Canada can produce either 90 units of cheese or 68 units of wine per labour hour. Suppose Canada follows its comparative advantage in deciding what to produce and trade with France at a trade price of 1.47 units of wine per unit of cheese. For every 5100 units of goods that Canada produces and trades with France, what are the gains from trade in terms of the other goods? Answer: units (DO NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL ANSWER. ENTER YOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES, AND NO SEPARATOR FOR THOUSANDS.) re

In the spot market, 17.6 Mexican pesos can be exchangedfor 1 U.S. dollar. A compact disc costs $15 in the United States. If purchasing power parity(PPP) holds, what should be the price of the same disc in Mexico?

A company manufactures a product in the United States and sells it in England. The unit cost of manufacturing is $52. The current exchange rate (dollars per pound) is 1.213. The demand function, which indicates how many units the company can sell in England as a function of price (in pounds) is of the power type, with constant 27556733 and exponent -2.5. A) Develop a model for the company's profit (in dollars) as a function of the price it charges (in pounds). Then use a data table to find the profit-maximizing price to the nearest pound. Assume that the price ranges from £45 to £100 in increments of £1. Round your answer for the maximum profit to the nearest dollar and your answer for the best price to the nearest pound.                                                                              1. Maximum profit: $______      2. Best price: £ ______

The exchange rates in New York for $1 are Can$1.0941 or 0.7257 pounds. In Toronto, Can$1 will buy 0.6722 pounds. How much profit can you earn on $8,500 using triangle arbitrage?"     $107.90     $114.25     $120.26     $105.46     $142.81

United Kingdom Imports. Toyota manufactures in Japan most of the vehicles it sells in the United Kingdom. The base platform for the Toyota Tundra truck line is JPY1,650,000. The spot rate of the Japanese yen against the British pound has recently moved from JPY197 = GBP1.00 to JPY190 = GBP1.00. How does this change the price of the Tundra to Toyota’s British subsidiary in British pounds?

Phillips NV produces DVD players and exports them to the United States. Last year the exchange rate was $1.25/euro and Phillips charged 120 euro per player in Euroland and $150 per DVD player in the United States. Currently the spot exchange rate is $1.65/euro and Phillips is charging $180 per DVD player. What is the degree of pass through by Phillips NV on their DVD players? 32% 62.5% O 4.1% O 20.0%

Suppose British pound = $1.60, Canadian dollar = $0.74, explain indirect rate, how many pounds must a British company pay to purchase goods costing $8,000 from a U.S. company?

Raghubhai