Question in munich a bratwurst costs 5 euros a hot dog, Ask an Expert

Economics

Question: In Munich, a bratwurst costs 5 euros; a hot dog costs $4 at Boston's Fenway Park. The euro/dollar exchange rate is $1.05/per euro (1 euro = $1.05 US).

a. What is the price of a bratwurst in terms of a hot dog?

b. All else equal, how does this relative price change if the dollar depreciates to $1.25 per euro?

c. Compared with the initial situation, has a hot dog become more or less expensive relative to a bratwurst?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92599095

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