The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

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Answer 1

Question

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

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A firm operates with the production function Q = K2 L. Q is the number of units of output per day when the firm rents K units of capital and employs L workers each day. The manager has been given a production target: to produce 8,000 units per day. She knows that the daily rental price of capital is $400 per unit and the wage rate is $200 day. a. What is the returns to scale of this production function? Show mathematically. b. Currently the firm employs 80 workers per day. What is the firm’s daily total cost if it rents just enough capital to produce at its target? c. Compare the marginal product per dollar spent on K and on L when the firm operates at the input choice in part (b). What does this suggest about the way the firm might change its choice of K and L if it wants to reduce the total cost in meeting its target? Explain your answer very clearly. d. In the long run, how much K and L should the firm choose if it wants to minimize the cost of producing 8,000 units of output a day?…

Answer 2

Question

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

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Answer 3

Question

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

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Answer 4

Question

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

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Answer 5

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

Answer 6

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.

Answer 7

Chapter 21, Problem 1QP

To determine

The relationship between Mexican demand for U.S. goods and supply of pesos and explain relation between U.S. demand for Mexican goods and supply of dollars.

Answer 8

Expert Solution & Answer

Explanation of Solution

Suppose a person, who is in Mexico needs to buy the product of U.S. but the Mexican has pesos, whereas the Americans have to be paid in terms of dollar. Hence, the person in Mexico needs to exchange the pesos with dollars.

As demand for U.S goods increases, demand for dollar also increases in order to buy the U.S. goods. The supply of pesos increases as there is an increase in the demand for dollar. Likewise, as demand for Mexican goods increases, the demand for pesos also increases in order to buy Mexican goods. Demand for pesos increases with increase in the supply of dollars.