Home to some of the world's most expensive restaurants and hotels, and with some prices rising more as the opening match approaches, Brazil will shock those visitors whose idea of a tropical paradise is paying $1 for a beachside beer.

Instead, Brazil is often the land of the $10 caipirinha (the sugar cane-based local drink of choice), the $100 risotto and the $1,000-a-night hotel room, prices fueled by many of the same imbalances and government policies that have restrained economic growth in recent years.

Even by European and U.S. standards, prices for basic items are often staggering.

In Sao Paulo, a bustling business hub that is surrounded by some of the country's largest coffee farms, an espresso often costs twice as much as in Lisbon, says Paulo Duarte, a pharmaceutical consultant who splits time between both cities.

"It's absurd," Duarte said. "We're talking about one country that produces coffee and another that imports it."

High prices are nothing new in Brazil. The country has a long history of economic instability and runaway inflation, which topped 2,400 percent a year as recently as 1993.

Inflation these days is much more manageable, running at about 6 percent a year, though that is still high by international standards. Sao Paulo, for example, is the most expensive city in the Americas and the 19th most expensive in the world, ahead of New York and London, according to a recent survey by the Mercer consulting firm. Rio is among the world's 30 most expensive cities.

One reason prices are so steep is because the cost of doing business is so high, thanks to a mind-boggling mix of taxes, import tariffs, bureaucracy and poor infrastructure that can make Brazil a difficult place to operate.

Economists have a name for that: "Custo Brasil," or "Brazil Cost." It can make goods manufactured 30 percent more expensive than those produced abroad, according to a study by the industry federation of Rio de Janeiro.

Making matters worse, production costs have climbed in recent years with rising wages and energy prices, while government policies aimed at bolstering household consumption have driven up prices at the cash register.

Even for tourists with some money to burn, creative solutions are often called for.

Dimitar Bogdanov and Simeon Vassilev, a Hungarian couple who visited Rio de Janeiro for the first time early this year, paid the equivalent of $100 for a risotto at one of the city's chic restaurants. But they decided to alternate their big nights out with simpler spots, and managed to spend "only" $30 at a per-kilo buffet place where you pay by the weight of your serving.

"Some things are way overpriced but some others are cheap compared to Europe," Bogdanov said, recommending that tourists splurge on Brazil's famous rubber flip-flops, which can retail for $24 overseas but cost as little as $8 here.