Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 15, Problem 20SQ
To determine
Cause of decrease in the
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In our pretend world there are two countries - Chile and Switzerland - that are engaged in trade. The firm Switzerland
Chocolates Express sells Boxes of chocolate (a good) in Chile. Each Box of Chocolates sells for 6500 Chilean pesos in
Chile. In Switzerland, each box of chocolates 11 Swiss Franc to produce. Assume that the firm has 1 million boxes of
chocolate to sell. How much money (in Swiss Franc) would the firm make (or lose) on the sale at the following exchange
rates:
Rate 1: 550 Pesos per Swiss Franc
Rate 2: 0.0015 Swiss Franc Per Chilean Peso
You work for a Nova Scotia Company trying to successfully enter the cranberry market in Australia. Analyze the entry country (Australia) based on the following;
What are the major exports, dollar value, and trends? What are the major imports, dollar value, and trends? Does the entry country have a surplus or deficit for trade? What are the exchange rates? Are there any restrictions on currency trade?
You should also consider sweat shops, skilled labor, employee unrest, political and social activists and labor unions in your analysis.
The following graph depicts the supply and demand curves for U.S. dollars in the foreign exchange market.
Suppose that Japan puts quotas on all U.S. imports.
On the graph, shift either the supply of dollars curve, the demand for dollars curve, or both curves to best reflect the given scenario.
PRICE (Yen per dollar)
S
D
QUANTITY OF DOLLARS (Millions per day)
If Japan puts quotas on all U.S. Imports, the U.S. dollar
6.4.
Chapter 15 Solutions
Micro Economics For Today
Ch. 15.4 - Prob. 1GECh. 15.6 - Prob. 1GECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQP
Ch. 15 - Prob. 9SQPCh. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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- An expected decline in demand for consumer goods in the U.S. means there will be less imports into the U.S. Less imports in the U.S. translates to a reduction in exports from China, which is significant as the U.S. has the largest GDP of all nations. As the U.S. is reducing imports, it will be purchasing less goods from China, which means the U.S. will be giving up less dollars to purchase Chinese goods with the yuan. Will a decline in demand for consumer goods in the U.S. impact China's economy given the above information? If so, how would that affect the dollar-yuan exchange rate?arrow_forwardIf the unites States imports more goods from abroad than it exports, foreigner will tend to have a surplus of US dollars. What will this do to the value of the dollar with respect to foreign currencies? What is the corresponding effort on foreign investments in the United Statesarrow_forwardSuppose that the exchange rate falls from 84 yen per U.S. dollar to 71 yen per U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan to sell in the foreign exchange market? The quantity of U.S. dollars that people plan to sell in the foreign exchange market A. decreases and the supply curve of U.S. dollars shifts leftward B. increases and the supply curve of U.S. dollars shifts rightward C. increases and a movement up along the supply curve for U.S. dollars occurs D. decreases and a movement down along the supply curve of U.S. dollars occursarrow_forward
- The small happy Kingdom of Pollyanna does not trade with the rest of the world, but uses U.S dollars for its currency. Its domestic price of tofu is $1 per pound and the Kingdom produces and consumes 5 tons of tofu. The world price of tofu is just $0.50 per pound. At this price, the Kingdom would produce only 2 tons of tofu and would consume 8 tons of tofu, and thus have to import 6 tons of tofu. How much consumer surplus would the Kingdom gain from opening up to trade? (Note: 1 ton = 2000 lbs.)arrow_forwardThe small happy Kingdom of Pollyanna does not trade with the rest of the world, but uses U.S dollars for its currency. Its domestic price of tofu is $1 per pound and the Kingdom produces and consumes 5 tons of tofu. The world price of tofu is just $0.50 per pound. At this price, the Kingdom would produce only 2 tons of tofu and would consume 8 tons of tofu, and thus have to import 6 tons of tofu. What is the deadweight loss in the tofu market associated with the Kingdom staying closed to trade? (Note: 1 ton = 2000 lbs.)arrow_forwardHow will the following events affect imports of a country, ceteris paribus? increase decrease no change Domestic income O level goes up Foreign income level goes up Domestic price level goes up Foreign price level goes up Exchange rate goes down (or domestic currency appreciates) O O O O O O O O O O O O O Oarrow_forward
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