Suppose that every month the average student in Tokyo, Japan, and the average student in Beijing, China, consume the following quantities of food and transportation services at the following prices:

a. Compute the average expenditure of the Japanese student for food and transportation services (in Yen). b. Compute the average expenditure of the Chinese student for food and transportation services (in Yuan).
c. Suppose that 1 Yuan is worth 17 yen. Compute the average expenditure of the Chinese student in Yen.
d. Using the purchasing power parity method, compute the average expenditure of the Chinese student in Yen.
e. Compare the standards of living of the Chinese and Japanese students. Which one is lower? What difference does the choice of method make?
 

Transcribed Image Text:

Food Transportation Services Quantity (meals) Quantity (rides) Price Price Tokyo ¥600 60 ¥170 80 Beijing RMB15 50 RMB3 100 Food Transportation Services Quantity (meals) Quantity (rides) Price Price Tokyo ¥600 60 ¥170 80 Beijing RMB15 50 RMB3 100

Answer rating: 100% (QA)

Average expenditure of the Japanese student 600 60 170 80 49600 a ... View the full answer