Alatte in the u. s. costs $3.00. an identical latte in country x costs 60 casatas. the implied exchange rate between the two currencies is casatas per dollar. at this rate of exchange a good that costs $30 in the u. s. should be expected to cost casatas in country x.:

The exchange rate would be 20 casatas per 1 dollar.

A good that costs 30 dollars should be expected to cost 600 casatas.

Explanation:

We can establish a ratio between these two currencies (where dollars is the numerator and casatas the denominator):

If we divide both the numerator and denominator by three we get:

Therefore, the exchange rate would be 20 casatas per 1 dollar.

At this rate of exchange a good that costs $30 in the U.S. should be expected to cost:

To solve this we can make two ratios and solve using a rule of three:

Now we will solve for x:

Therefore it should be expected to cost 600 casatas.

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