Introduction to Economics, Econ101

Case Study One: The Big Mac Index

Deadline: 13/10/2018, submit the presentation to your tutor, Presentation takes place in the week
beginning 22/10/2018. The presentation is worth 10% of the overall mark of the course.

Your presentation should not be longer than 10 minutes. You may use powerpoint for our
presentation.

Answer only one of the questions below. Your tutor will assign a question to you.

Visit the following webpages: www.economist.com/content/big-mac-index,

en.wikipedia.org/wiki/Law_of_one_prize

Questions:

1) Research the “Law of one Price”. In your own words, what does this theory mean? You may
use the Wikipedia webpage.
2) Explain in your own words the main idea of the Big Mac Index (use the economist webpage)
3) Present the Big Mac Index for Switzerland, Norway, United States, New Zealand, Egypt,
Taiwan and Ukraine. Explain for which countries from the above list the Big Mac is over- or
under-valued (select Euro as the base currency). What does an over- or undervaluation
actually mean?