Suppose the price of an iPad is $500 in the United States and 30,000 rupees in India.If an iPad is representative of the average prices in a country,then the price of a basket of goods worth $1 in the United States costs ________ rupees in India.

Question

Quizplus · Accepted Answer

To find the price of a basket of goods worth $1 in the United States in rupees, we need to compare the purchasing power parity (PPP) between the two countries. We can use the iPad prices as a proxy for the PPP. 
The ratio of the price of an iPad in the US to India is:
$500 ÷ 30,000 rupees = 1/60
This means that the value of $1 in the US is equal to 1/60th of the value of 30,000 rupees in India. 
So, the price of a basket of goods worth $1 in the US would cost:
1/60 x 30,000 = 500 rupees
Therefore, the correct answer is C).

Suppose the Price of an IPad Is $500 in the United