The images show the cost of the same bike in the United States and Britain. 2 bikes are shown. The first bike costs 75 U S dollars, and the second bike costs 49.50 British pounds. The concept shown in the images is known as

purchasing power parity edgenuitry

Explanation:

The concept defined is known as Purchasing Power Parity (PPP).

The Purchasing Power Parity theory, is a economic theory used to establish exchange rates between currencies from different countries based on the statement that the rates obtained have to maintain the same purchasing power in both states.

Therefore, the exchange rates between the British and US currencies, have to be calculated in such a way the the real cost of the bike in both countries is exactly the same.

The correct answer is: "Purchasing Power Parity"

The theory of the Purchasing Power Parity is used to compare the cost of life  and living standards between two countries that use two different currencies. This is done by comparing two curriencies through a basket of goods, by comparing their market prices and, therefore, how they are valued under each currency. This enables to conclude how much of each currency you need to purchase an specific product (a bike) and hence, the purchasing power of consumers who hold that currency.

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