# 5 the canadian dollar is initially at a foreign

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5. The Canadian dollar is initially at a foreign exchange rate of \$.50 per pazooza. If the dollar appreciates by 20% against the pazooza and then depreciates by 20% against the pazooza, what is the final net effect on the exchange rate, expressed in pazoozas per dollar? 6. The Canadian dollar is initially at a foreign exchange rate of \$.50 per pazooza. If the dollar depreciates by 20% against the pazooza and then appreciates by 20% against the pazooza, what is the final net effect on the exchange rate, expressed in pazoozas per dollar? 7. The small country of Minisculia has a fixed daily total supply of capital ( K ) equal to 360 machine-days, and a fixed daily total supply of labour ( L ) equal to 120 labour- days, both of which are fully employed. It uses only K and L in combination to pro- duce only two goods: Apples ( A ) and Blankets ( B ). Initially, the K/L ratio in the Blanket sector is 4 machine-days/labour-day, and the K/L ratio in the Apple sector is 2.4 machine-days/labour-day. (a) Initially, how many workers are employed in the Blanket sector? (b) Because of an increase in the wage rate, both sectors adopt a higher K/L ratio: 14/3 in the Blanket sector, and 8/3 in the Apple sector. Now how many workers are employed in the Blanket sector? (c) Suppose that the K/L ratios in the two sectors are the same as in (a), but that total available capital has increased to 432 machine-days. Now how many workers are employed in the Blanket sector? M7-4 MATH MODULE 7: PROPORTIONS, WEIGHTS, AND PERCENTAGES

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8. Initially, 1 Canadian dollar exchanges for 40 pazoozas, and 1 pazooza = 5 zlotniks. Then the dollar appreciates by 50% against the pazooza, and the zlotnik depreciates by 20% in terms of pazoozas. (a) By how much has the pazooza depreciated against the dollar? (b) By how much has the pazooza appreciated against the zlotnik? (c) Now how many zlotniks exchange for \$1 Canadian? 9. “Half of Loonie Larry’s goods are 60% more expensive than Crazy Curly’s goods, and the other half are only 40% cheaper than at Crazy Curly’s. Therefore, shop at Crazy Curly’s!!” Suppose that both stores carry exactly the same products, and that you plan to buy one unit of each product, but have only enough time to shop at one of the two stores. At which of the two should you shop? [ Caution : this is a bit tricki- er than it looks.] MATH MODULE 7: PROPORTIONS, WEIGHTS, AND PERCENTAGES M7-5
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