Suppose the Exchange Rate Between the Japanese Yen and the U.S.dollar

question 87

Multiple Choice

Suppose the exchange rate between the Japanese yen and the U.S.dollar is 100 yen per dollar.A Japanese stereo with a price of 60,000 yen will cost

• A) $60.
• B) $600.
• C) $6000.
• D) $5000.

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Definitions:

Cross-price Elasticity

Measures the responsiveness of the demand for one good to a change in the price of another good.

Good Y

Typically, a variable used in economic models to represent a generic good or service in the market.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.

Inferior Good

is a type of good whose demand decreases when the income of consumers increases, contrary to what is observed with normal goods.