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Textbooks / Business / Principles of Economics 6 / Chapter 32 / Problem Problems and Applications 32.5

Suppose the French suddenly develop a strong taste for California wines. Answer the

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw ISBN: 9780538453059 472

Solution for problem Problems and Applications 32.5 Chapter 32

Principles of Economics | 6th Edition

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Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Principles of Economics | 6th Edition

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Problem Problems and Applications 32.5

Suppose the French suddenly develop a strong taste for California wines. Answer the following questions in words and with a diagram. a. What happens to the demand for dollars in the market for foreign-currency exchange? b. What happens to the value of dollars in the market for foreign-currency exchange? c. What happens to the quantity of net exports?

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o Factors that change the budget line  Income – a change in income causes a shift of the budget line  Price of y – a change in price causes a rotation of the budget line Week 7 2/29/16  Price of x – a change in price causes a rotation of the budget line o What do we buy first  The good that gives us the most:  Marginal utility per dollar = MU / P  Vacation vs. Cheeseburger o MU of vacation = 50,000 utils

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Textbook: Principles of Economics
Edition: 6
Author: N. Gregory Mankiw
ISBN: 9780538453059

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Suppose the French suddenly develop a strong taste for California wines. Answer the