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The price of a dozen roses in the United States is $30. If $0.2597 can purchase 1.00 Israeli shekel, how much does the same dozen roses cost in Israel if purchasing power parity holds? shekels

Part 2 (1 point)See Hint If the actual price of a dozen roses in Israel is more than the answer you found in Part 1, how might you account for the discrepancy? Choose one or more:

A. The roses are not identical products.

B. Purchasing power parity exists only for manufactured products.

C. Transportation costs are higher for the roses bought in Israel.

D. Prices may not have fully adjusted.

Respuesta :

Answer:

Part 1: If power parity holds, a dozen of roses in Israeli shekel price is 115.5179. Part 2: C. Transportation costs are higher for the roses bought in Israel.

Explanation:

A rose is a primary product that has the same production process everywhere. Nevertheless, it requires climate conditions that Israel does not have, so the potential difference in price is transportation cost

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