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1. A Ford F-150 currently costs USD 45,000 in the US, and MXN 640,000 in Mexico. The current exchange rate is MXN 20 per USD.

1. A Ford F-150 currently costs USD 45,000 in the US, and MXN 640,000 in Mexico. The current exchange rate is MXN 20 per USD. a. Given these prices, what is the PPP exchange rate between USD and MXN? (5 points) b. What would it cost you in USD to buy a Ford F-150 in Mexico? (10 points) c. If the exchange rate stays at MXN 20 per USD, and Americans and Mexicans are free to buy and sell trucks as they wish, would you expect the price of a pickup truck in Arizona to go up or down? Why? (15 points)

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