Scenario: The price of a given basket of goods in Country 1 is 10 karls. The price of the same basket of goods in Country 2 is 25 ritz and is $2 in the United States. Country 1 has an income per capita of 3,200 karls, and Country 2 has an income per capita of 5,500 ritz.
-Refer to the scenario above.The price of a basket of goods worth $1 in the United States is ________ in Country 1.
A) 5 karls
B) 20 karls
C) 25 karls
D) 50 karls

Question

Quizplus · Accepted Answer

To find the price of a basket of goods worth $1 in Country 1, we need to first convert the price of the same basket in Country 2 to USD. 
Price of the basket in Country 2 = 25 ritz = $2
Price of the basket in Country 1 = 10 karls
$1 = 2/25 * 10 karls = 0.8 karls
Therefore, the price of a basket of goods worth $1 in Country 1 is 0.8 karls. However, since there is no option for 0.8 karls, the closest option is 5 karls.

Scenario: the Price of a Given Basket of Goods in Country