John wants to buy a new lawn mower.He can either buy it in the US and pay $500 or buy it in Mexico and pay 6188 Mexican Pesos.At the exchange rate of 1 Mexican Peso=0.771US$,ignoring any other costs,he would
A)Prefer buying in the US
B)Prefer buying in Mexico
C)Be indifferent about where he buys his television
D)None of the above

Question

John wants to buy a new lawn mower.He can either buy it in the US and pay $500 or buy it in Mexico and pay 6188 Mexican Pesos.At the exchange rate of 1 Mexican Peso=0.771US$,ignoring any other costs,he would​
A)​Prefer buying in the US
B)Prefer buying in Mexico
C)Be indifferent about where he buys his television
D)​None of the above

Quizplus · Accepted Answer

At the given exchange rate, 6188 Mexican Pesos would convert to 6188 * 0.771 = $4770.588 US dollars, which is cheaper than the $500 price in the US. Therefore, John would prefer buying in Mexico.

John Wants to Buy a New Lawn Mower