A pair of earrings costs £40 in Britain. An identical pair costs $50 in the United States when the exchange rate is £1 = $1.50. Which statement is correct (all else being equal)?

Question

BlackTom AI · Accepted Answer

Convert prices into a single currency to compare real cost given the exchange rate.

1. Relevant knowledge points and concepts
- An exchange rate (here £1 = $1.50) tells how many dollars one pound buys. To compare prices in two currencies, convert one price into the other currency using the exchange rate.
- The cheaper converted price indicates the better deal (all else equal).

2. Step-by-step reasoning
- Start with the British price: £40. Use the exchange rate £1 = $1.50 to express £40 in dollars.
- Alternatively, convert the U.S. price $50 into pounds to check consistency.

3. Calculations with intermediate steps
- Convert £40 to dollars:
  £40 × ($1.50 / £1) = $60.
  (Because each pound is worth $1.50, forty pounds are worth 40 × 1.50 = 60 dollars.)
- Convert $50 to pounds:
  $50 ÷ ($1.50 / £1) = $50 ÷ 1.50 = £33.333... (or £33 1/3).
  (Because one dollar is 1/1.50 = £0.666... so $50 equals 50 × 0.666... = £33.333...)

4. Why the correct answer is correct
- Comparing like-for-like: the British pair costs $60 when expressed in dollars, while the U.S. pair costs $50. Therefore the U.S. price is $10 less, making the United States the better deal.
- The pound price comparison (£40 vs £33.33 after converting $50) yields the same conclusion: the U.S. option is cheaper.

5. Why the other options are incorrect
- "The deal is the same in both countries." Incorrect because $60 (British price converted) ≠ $50 (U.S. price); they are not equal.
- "Britain offers a better deal." Incorrect because £40 (equivalent to $60) is more expensive than the U.S. $50 price; Britain is the costlier option.

6. Conclusion
Converting currencies shows the U.S. price ($50) is cheaper than the British equivalent ($60), so the United States offers a better deal. This matches the provided answer.

A pair of earrings costs £40 in Britain. An identical pair costs $50 in the United States when the exchange rate is £1 = $1.50. Which statement is correct (all else being equal)?Single choice

Similar Questions

Based on the information provided, one Canadian dollar is equal to _ Mexican pesos and _ Indian rupees. Table: Exchange Rates Across Currencies [table] Country | Price per US dollar (January 1, 2006) Canada | CA$1.2 Japan | 120 yen Mexico | 12 pesos India | 45 rupees [/table]

The exchange rate is 1.16 Swiss francs per dollar. How many U.S. dollars are needed to purchase 3,500 Swiss francs?

If US$1 = Yen145.59 (USD/JPY) and US$1 = Mexican Peso 22.54 (USD/MXN), how many Yen would be equivalent to 1 Mexican Peso (MXN/JPY)?

Question at position 4 The exchange rate is 1.2 euros per United States dollar. If a restaurant meal costs 30 euros in Paris, France, what is its dollar cost to a United States tourist? $2.50$30$36$3.60$25

If the exchange rate is 80 yen per dollar, then a hotel room in Tokyo that costs 25,000 yen costs $200.

Question at position 5 The exchange rate is 1.2 euros per United States dollar. If a restaurant meal costs 30 euros in Paris, France, what is its dollar cost to a United States tourist? 4MA68$30 $2.50$36 $3.60 $25

If one U.S. dollar equals 5.76 Egyptian pounds and one U.S. dollar equals 0.56 British pounds, how many Egyptian pounds equals one British pound? A) 10.29 Egyptian pounds B) 0.097 Egyptian pounds C) 5.200 Egyptian pounds D) 3.226 Egyptian pounds

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler