A good economic theory brings clarity to chaos

Refer to Table 18-4. The table above outlines the rankings of three members of the U.S. House of Representatives on three spending alternatives

Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom, Dick, and Harriet, all members of the House of Representatives, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1 ) Foreign Aid and Post-Secondary Education (2 ) Foreign Aid and Roads and Bridges and (3 ) Post-Secondary Education and Roads and Bridges. Determine whether the voting paradox will occur as a result of these votes.

Find the real exchange rate for the following case: Assume that the representative basket of European goods and services costs 40 euros and the representative U.S

basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ________.