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The following information is available to a Zambian trader:
i. Percentage spread given for Zambian kwacha per US dollar is 0.1%. The ask rate for Zambian kwacha per C$ dollar is K9.526
ii. Canadian dollars per US dollar C$ 1.2780/US$
iii. Kwacha per US dollar K8.524/US$
a) Calculate the bid rate
b) Determine if there is any opportunity for arbitration
c) Explain How a Zambian trader with K1, 200,000 can use this amount to benefit from the inter market arbitrage?
What will be the profit or loss for the trader?
You have just graduated from the Information Communication University (ICU) of
Lusaka in Zambia and are leaving on a whirlwind tour to see some friends. You wish to
spend USD 1,000 each in Germany, New Zealand, and Great Britain (USD 3,000 in total).
Your bank offers you the following bid-ask quotes:
USD/EUR 1.304-1.305, USD/NZD 0.670.69, and USD/GBP 1.90-1.95.
(a) If you accept these quotes, how many EUR, NZD, and GBP do you have at departure?
(b) If you return with EUR 300, NZD 1,000, and GBP 75, and the exchange rates are unchanged, how many USD do you have?
(c) Suppose that instead of selling your remaining EUR 300 once you return home, you want to sell them in Great Britain. At the train station, you are offered GBP/EUR 0.66-0.68, while a bank three blocks from the station offers GBP/EUR 0.665-0.675.
i) At what rate are you willing to sell your EUR300?
ii) How many GBP will you receive?
Assume that there is an increase in the price of petroleum ..using a graph illustrate and explain the effects of this on output and commodity price in the economy?
Using an appropriate graph, demonstrate the changes in the firm’s demand for labour in
terms of:
(a) changes in market wage rate. (20 marks)
(b) changes in the price of output (that produced by the labour).
Elmer's utility function is U(x, y) = min{x, y2}. If the price of x is $25 and the price of y is $15 and if Elmer chooses to consume 7 units of y, what must his income be?
Using a diagram, explain the concept of quota and how it can create dead-weight loss.
Suppose Burger and Fries are complementary goods to a consumer. Now if the price of Burger increases (everything else stays the same) then what will happen to the equilibrium price and quantity of Fries. Explain using a diagram.
a) Suppose in winters demand of dry fruits increases. Further supply of dry fruit increases due to favorable environmental condition. Explain with the help of demand and supply curve, how price and quantity will respond
(b) Consider an economy can produce two goods butter and guns. Draw Production possibility frontier for butter and guns. Assume that scientific inventions have doubled the productivity of society's resources. Redraw the Production Possibility frontier
mr. green is a teacher that has a job at a school , he earns k560 per hour at this school and earns a k70 at his part time job per hour. the previous week mr eaned a k3500 in both after working for 20 hours. write down the simultanaous equation that represent the above information and how long did mr greeen work on his full time job and part time job respectively
Assume that the markets for sugar cane, rum and whiskey are initially in equilibrium (i.e., supply equals demand in each case). Assume further that a good harvest impacts the world’s sugar cane crop. Sugar cane is a principal ingredient in rum, but it is not an ingredient in whiskey. Rum and whiskey are substitutes in consumption.
(i) Discuss the impact of the good harvest on each of the three markets.
(ii) Discuss the effect on the markets for each of the three products if the government implements a price restriction in the sugar cane market with the aim of protecting the farmers. How will this impact the revenues for sugar growers, rum producers and whiskey producers?
