Oolong tea is produced in China and sold in manycountries. In the province of Fujian, per 100 gramsof Oolong tea sells for 50 yuan. In Kuala Lumpur,per 100 grams of the same Oolong tea sells forRM20. Suppose that the exchange rate is RM0.451 yuan.Please do the following calculations based on theabove information:1. How much would it cost in Malaysian currencyto buy the tea in Fujian?2. How much would it cost in China currency tobuy the tea in Kuala Lumpur?

here we calculate the given by following method as follow;

Please do the following calculations based on the above information: 1. How much would it cost in Malaysian currency to buy the tea in Fujian? 2. How much would it cost in China currency to OUy the toa in Kuala Lump ur?

Please do the following calculations based on the above information: 1. How much would it cost in Malaysian currency to buy the tea in Fujian? 2. How much would it cost in China currency to OUy the toa in Kuala Lump ur?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 5CQQ

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Question

Oolong tea is produced in China and sold in many
countries. In the province of Fujian, per 100 grams
of Oolong tea sells for 50 yuan. In Kuala Lumpur,
per 100 grams of the same Oolong tea sells for
RM20. Suppose that the exchange rate is RM0.45
1 yuan.
Please do the following calculations based on the
above information:
1. How much would it cost in Malaysian currency
to buy the tea in Fujian?
2. How much would it cost in China currency to
buy the tea in Kuala Lumpur?

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