He is right because 70 is ten times greater then 7 and the question is if the 7 in the hundredths which equals 70, is 10 times greater than the 7 in the thousandths, which is equal to 7. (7 X 10 equals 70.) Hope this helps! :)
When you multiply or divide in scientific notation, you just add or subtract the exponents. When you add or subtract in scientific notation, you have to make the exponents the same before you can do anything else.