Question

Question 19 (2.5 points) Suppose the exchange rate between yen and dollars is currently set at 125 yen per dollar. If Japanese in Valdosta, GA purchased a commodity that sells for $250, this would cost the equivalent of 31,250 yen 2 yen 312.5 yen 200 yen

Answer 1

Cost Equivalent in Yen = Cost equivalent in USD * Exchange Rate in yen/$

= 125*250 yen

= 31250 yen.

Therefore (a) 31250 yen is the answer to this question

24) Because TV production is taken less time in Belgium, Belgium has the absolute advantage in steel.

Opportunity cost of one unit of broom for Belgium =

Number of labour hours for broom / Number of labour hours for steel

= 9800/310 = 31.61 units steel

Opportunity Cost of one unit of broom in Austria = 9800/330 = 29.69 units steel

Because opportunity cost of broom is less in Austria, it has comparative advantage in broom

Therefore (b) Belgium, Austria is the answer to this question

27) Opportunity Cost of bread = Carpet / Bread

Opportunity cost of bread in Ireland = 150000/4 = 21428.57 carpet

Opportunity cost of bread in Turkey = 180,000/6.9

= 26086.95 carpet

Because the opportunity cost of bread is less in Ireland, opportunity cost of carpet would be less in Turkey

Turkey will export carpet and Ireland will export bread and therefore

(a) Ireland, Turkey is the answer to this question