The price of shoes in japan is yen 1000. when exchange rate is yen=$1/100, the quantity of imports of shoes from japan is 15. today, the exchange rate is yen=$1/200, and the quantity of imports of shoes from japan has risen to 2 what is the elasticity of imports? (use the situation with yen=$1/100 as the starting point)

The elasticity of imports is 0.67.

Explanation:

% Change in demand for imports = (200,000/150,000) - 1

                                                        = 1.3333 - 1

                                                        = 33.3%

% Change in price of imports = [(1/200)/(1/100)] - 1

                                                 = (100/200) - 1

                                                 = 0.5 - 1

                                                 = -50%

Elasticity of imports

= % Change in demand for imports / % Change in price of imports (exchange rate)  

= 33% / (- 50%)

= - 0.67

Absolute value = 0.67

Therefore, The elasticity of imports is 0.67.

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