Assume the Hong Kong dollar (HK$) value is tied to the U.S. dollar and will remain tied to the U.S. dollar. Last month, a HK$ = 16 JPY (Japanese Yen). Today, a HK$=20 JPY. Assume that there is much trade in the computer industry among Japan, Hong Kong, and the U.S. and that all products are viewed as substitutes for each other and are of about the same quality. Assume that the US manufacturer is DELL, the HK manufacturer is Lenovo and the Japanese Manufacturer is Toshiba.

a. Will the computer exports of Dell to Hong Kong increase, decrease, or remain the same? Briefly explain.

b. Will the computer exports from Toshiba to the U.S. increase, decrease, or remain the same? Briefly explain.

c. What is the impact of the currency changes on the market shares of these companies?