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Beeronomics and Purchasing Power Parity
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Purchasing power parity is the economic theory that the same basket of goods should have the same price in two different countries, after taking exchange rates into account. The Economist magazine has published the Big Mag index for years where the price of a Big Mac is compared across countries. But the infographic below does the same thing with the price of beer.

 

chartoftheday_14204_beer_prices_in_european_cities_n

 

For discussion:

What are some differences between a Big Mac and a pint of beer that would explain why purchasing power parity does not hold for beer?

 

 Video available in MindTap: