Betty's Bakery bakes fresh bread every morning. Any bread not sold by the end of the day is thrown away. A loaf of bread costs Betty $2.00 to produce, and she prices loaves of bread at $3.50 per loaf. Suppose near the end of one day Betty still has 12 loaves of bread on hand. Which of the following is correct?
a. Betty should only sell the remaining bread for $3.50 per loaf since that is the regular price.
b. Betty should only sell the remaining bread for $2.00 per loaf or more since that is what the bread costs to make.
c. Betty should be willing to sell the remaining bread for any price above $0 per loaf since she will have to throw it away if she does not sell it for something.
d. Betty should just throw the bread away and change the price of her bread starting tomorrow to make sure she sells all of her bread each day.
c
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To calculate the multilateral effective exchange rate for a nation for each trading partner:
a. add the share of trade to the % change in the exchange rate and add the sums. b. divide the share of trade by the % change in the exchange rate and add the dividends. c. subtract the share of trade from the % change in the exchange rate and add the differences. d. multiply the share of trade by the change in the exchange rate and add the products
If one U.S. dollar could be exchanged for one Canadian dollar in 1970, and one U.S. dollar can now be exchanged for 1.13 Canadian dollars, which of the following is true?
A) The U.S. dollar lost value against the Canadian dollar. B) The Canadian dollar lost value against the U.S. dollar. C) The Canadian dollar gained value against the U.S. dollar. D) Both A and C are true.