ECON305 WEEK 2 DISCUSSIONS 1 AND 2

WEEK 2

Supply and demand is used extensively in Chapter 4. To be sure that everyone has a full understanding of how to solve supply and demand problems, our first discussion will be a supply and demand problem.

First review the attachments, then provide a step by step solution to the following problem (see the attachments for the steps):

That the case of the machine tool industry in a closed economy. The market begins in equilibrium. The government imposes 10% VAT tax on all producers of machine tools.

Provide a step-by-step explanation of the changes in the machine tool market as a result of the tax.

Remember that the order of events is important. Also use correct terminology (see attachments),

Supply and Demand Guide

Supply and Demand Presentation

Review the attached presentations on exchange rates.

Then go to the X-Rates Web site (http://x-rates.com) and find the current:

a) exchange rate for the US Dollar (USD) and any other country's currency that you wish to study. Do NOT select the Chinese Yuan as your other currency since it is not a freely floating currency;

b) then in the Monthly Average display, select the last 12 months from the drop down menus and click "Go";

c) based on the 12 months of data, which currency is appreciating (gaining value) and which is depreciating (losing value)? Remember it can do both in a year.

Report your finding to the class in your discussion post.

Exchange Rates Part 1

Exchange Rates Part 2