Terry lamoreaux has homes in both sydney, australia andphoenix, arizona. he travels between the two cities at least twice a year. because of his frequent trips he wants to buy some new, high quality luggage. he's done his research and has decided to go with a briggs and riley brand three-piece luggage set. there are retails stores in both phoenix and sydney. terry was a finance major and wants to use purchasing power parity to determine if he is paying the same price no matter where he makes his purchase.

a. if the price of the 3-piece luggage set in phoenix is $857 and the price of the same 3-piece set in sydney is a $930,using purchasing power parity, is the price of the luggage truly equal if the spot rate is

a $1.0852/$?

b. if the price of the luggage remains the same in phoenix one year from now, determine what the price of the luggage should be in sydney in one-year's time if ppp holds true. the u. s. inflation rate is 1.14%

and the australian inflation rate is 3.18%.

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms.if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.