Much of the demand for Candian wheat comes from the other countries that buy wheat from Canada. With the help of a demand-supply diagram explain, what happens to the demand for Canadian wheat if the Canadian dollar appreciates in value compared to other currencies holding all other influences constant. [ Note: An appreciation of a currency means that people from other countries have to spend more of their own currency to buy the appreciated currency.]

b) (Are the following statements true or false? Explain your answers.

i) The elasticity of demand is the same as the slope of the demand curve.

ii) (2.5 points)The cross-price elasticity will always be positive.