The Following Table Shows the Price,in Canadian Dollars,of Utops,the Currency

question 92

Multiple Choice

The following table shows the price,in Canadian dollars,of utops,the currency used in the hypothetical economy of Utopia.Assume that a system of flexible exchange rates is in place.

-Refer to the information above to answer this question.Suppose that Utopia decided to import more products from Canada.What would we expect?

• A)That the demand for utops would rise and the dollar would appreciate
• B)That the demand for utops would fall and the dollar would depreciate.
• C)That the supply of utops would rise and the dollar would appreciate.
• D)That the supply of utops would fall and the dollar would depreciate.

---

Definitions:

Income Effects

Changes in consumer behavior as a result of an individual's income changing, affecting the quantity demanded for goods and services.

Optimal Consumption Bundle

The consumption bundle that maximizes a consumer’s total utility given that consumer’s budget constraint.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford, based on income and prices.

Marginal Utility

The additional satisfaction or benefit (utility) that a consumer derives from buying an additional unit of a commodity or service.