Assuming the price elasticity, Microeconomics

Assignment Help:

Assume the United States exports 1000 computers at a price of $3000 each and imports 15 UK autos at a price of 10000 pounds each. Assume that the dollar/pound exchange rate is $2 per pound.

a. Calculate in dollar terms, the US export receipts, import payments and trade balance prior 

b. Suppose the dollar’s exchange value depreciates by 10%. Assuming that the price elasticity 

c. Now assuming that the price elasticity of demand for US exports equals 0.3 and the price to a depreciation in the dollar’s exchange rate. of demand for US exports equals 3.0 and the price elasticity of demand for US imports equals 2.0, does the dollar depreciation improve or worsen the US trade balance? Why?

elasticity of demand for US imports equals 0.2. Does this change the outcome? Why?


Related Discussions:- Assuming the price elasticity

Consumer equlbrim, how can a consumer get maximum Equlbrim

how can a consumer get maximum Equlbrim

Theory of perfect competition, Perfect competition has the following charac...

Perfect competition has the following characteristics: 1. Large number of firms - There are a large number of firms in the market. Due to this each firm produces a very small fr

Explain about natural monopoly, Q. Explain about Natural Monopoly? Natu...

Q. Explain about Natural Monopoly? Natural Monopoly: In some industries, economies of scale are so strong that it makes most economic sense for there to be just one supplier. T

Income elasticity of demand, what are the practical importance of income el...

what are the practical importance of income elasticity of demand?

Define law of demand, Define law of demand.  Answer:   Quantity demande...

Define law of demand.  Answer:   Quantity demanded increases as price falls, other things constant. In other words, "Other things remaining the same, when the price of a good r

Calculate the annual cost to entire industry from closures, 1.  National Ma...

1.  National Marine Fisheries Service is considering closing a large area of federal waters to fishing in Alaska due to negative interactions of fishing with endangered Steller sea

What is the difference between price value and price level, What is the dif...

What is the difference between price value and price level?  Price value is the value of commodity bought by the consumer at a certain price from the market, while, price level

Consumer surplus, What is consumer surplus? What is its significance and wh...

What is consumer surplus? What is its significance and what causes it to change?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd