Question

A cup of Trung Nguyen coffee sells for 50,000 Vietnam dong (VND). One South African rand (ZAR) is equivalent to 2,000 dong. The equilibrium price of the cup of coffee in South African rand is ZAR 100,000,000.

True or False?

Answer 1

1 Cup of Trung Nguyen coffee = 50,000 Vietnam dong (VND)

1 South African rand (ZAR) = 2,000 dong

So, 1 Cup of Coffee in South African Rand = 50,000 dong/2000 dong per ZAR

= ZAR 25

So, the equilibrium price of the cup of coffee in South African rand is ZAR 25 and not ZAR100,000,000

So, the Statment is False.

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