FALL 2018 Micro 16 Week ECON 2302,59899.007 Quiz: Chapter 3 Quiz Question: 2 pts

ID: 1135814 • Letter: F

Question

FALL 2018 Micro 16 Week ECON 2302,59899.007 Quiz: Chapter 3 Quiz Question: 2 pts 1 of 20 (0 complete) 2004 Hospital Room (1 day) Hotel Suite (1 night) 2003 $200 $300 $325 Based on the table above, which of the following is true? A. The money prices of both goods increased, the relative price of hospital rooms decreased, and the relative price of hotel suites increased. O B. The money prices of both goods increased and the relative prices of both goods decreased. C. The money pnces o both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased. O D. The money prices of both goods increased and the relative prices of both goods increased.

Explanation / Answer

Option C.

2003

2004

Price ratio

% increase

H.Room

200

225

1.125

12.50%

H.Suite

300

325

1.083

8.30%

We can see that H.Room price increases by 12.5 percent and H.suite by 8.3 percent hence realtively H.Room prices relatively increased and H.Suite decreased.