Question

Think of examples of goods whose relative price has risen or fallen by a large amount. In​ 2007, the price of a gallon of gas was​ $2.59. In​ 2017, the price of a gallon of gas was​ $2.32 In​ 2007, the price of a dozen eggs was​ $1.63. In​ 2017, the price of a dozen eggs was​ $1.40. Between 2007 and​ 2017, the relative price of a gallon of gas with respect to a dozen eggs​ _______ and the relative price of a dozen eggs with respect to a gallon of gas​ _______.

Answer 1

Answer: Between 2007 and​ 2017, the relative price of a gallon of gas with respect to a dozen eggs​ rose and the relative price of a dozen eggs with respect to a gallon of gas​ fall.

Step-by-step explanation:

Given: In​ 2007, the price of a gallon of gas was​ $2.59.

In​ 2017, the price of a gallon of gas was​ $2.32.

Change in price of a gallon of gas = price in 2017 - price in 2007

= $2.59 - $2.32

= $0.27

In​ 2007, the price of a dozen eggs was​ $1.63.

In​ 2017, the price of a dozen eggs was​ $1.40.

Change in price of a dozen eggs = price in 2017 - price in 2007

= $1.63 - $1.40

= $0.23

Clearly, Change in price of a gallon of gas > Change in price of a dozen eggs

It means, Between 2007 and​ 2017, the relative price of a gallon of gas with respect to a dozen eggs​ rose and the relative price of a dozen eggs with respect to a gallon of gas​ fall.