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 machinedays, 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 machinedays/labourday, and the
K/L
ratio in the Apple sector is
2.4 machinedays/labourday.
(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 machinedays.
Now
how many workers are
employed in the Blanket sector?
M74
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
M75
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 Fall '12
 Danvo
 Supply And Demand, Foreign exchange market, United States dollar, Canadian dollar, Math Module

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