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Managerial Economics 2nd Edition by William Boyes
Edition 2ISBN: 978-0618988624Managerial Economics 2nd Edition by William Boyes
Edition 2ISBN: 978-0618988624 Exercise 15
Mexico and the United States are the only producers and consumers of a certain type of electronic switch. The demand for and supply of the electronic switch in each country is as shown in the following table.
a. Suppose that there is free trade and that the exchange rate is 9.5 pesos to the dollar. What is the equilibrium price?
b. Which country will export the switches to the other country?
c. Suppose the United States imposes a tariffof $100 per switch. What will happen to imports and exports?
d. Suppose the exchange rate changes to 10 pesos to the dollar. How does that change the answers to the previous questions?
a. Suppose that there is free trade and that the exchange rate is 9.5 pesos to the dollar. What is the equilibrium price?
b. Which country will export the switches to the other country?
c. Suppose the United States imposes a tariffof $100 per switch. What will happen to imports and exports?
d. Suppose the exchange rate changes to 10 pesos to the dollar. How does that change the answers to the previous questions?
Explanation
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Managerial Economics 2nd Edition by William Boyes
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