Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 4, Problem 5WNG
To determine
The relative price.
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The absolute prices of goods X, Y, and Z, respectively, are $23, $42, & $56.(a) What is the relative price of X in terms of Y?(b) What is the relative price of Y in terms of Z?(c) What is the relative price of Z in terms of X?
Explain with the help of a graph how production and consumption of cloth are affected when the relative price of cloth increases.
What is an example of a change in relative price compared to a change in general price?
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- If the prices of both goods increase by 50% while income remains constant what will happen?arrow_forwardwhat does it mean when we say price changes? in economicsarrow_forwardIf your income or the income of your family is not enough to purchase the basic commodities needed by your family, what goods would you buy, instead? How would you respond to the price changes of these commodities?arrow_forward
- The market price of pizzas in a college town increased recently, and the students in an economics class are debating the cause of the price increase. Some students suggest that the price increased because several pizza parlors in the area have recently gone out of business. Other students attribute the increase in the price of pizzas to a recent decrease in the price of beer. Everyone agrees that the decrease in the price of beer was caused by a recent decrease in the price of grain, which is not generally used in making pizzas. The first group of students thinks the increase in the price of pizzas is due to the fact that several pizza parlors in the area have recently gone out of business. On the following graph, adjust the supply and demand curves to illustrate the first group’s explanation for the increase in the price of pizzas. (graph in photo) The second group of students attributes the increase in the price of pizzas to the decrease in the price of beer.…arrow_forwardIn the country of Solow, people buy only three things: food, rent, and luxury goods. Last year, the price of luxury goods went down, and the price of rent increased five percent. Overall CPI inflation increased 10%. What happened to the price of food? a) The price of food increased by exactly 10% b) The price of food increased by more than 10% c) The price of food increased by between 5% and 10% d) The price of food must have gone down e) None of these choices are correctarrow_forwardIf the price of sodium-sulfur batteries decreases, the price of lithium batteries willarrow_forward
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