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kolezko [41]
3 years ago
15

If the relative price of one unit of good y is 0.25 units of good z, then it follows that the absolute price of good z can be __

________ and the absolute price of good y can be __________. a. $4,000; $2,000 b. $1,000; $2,000 c. $2,000; $1,000 d. A and c
Business
1 answer:
Klio2033 [76]3 years ago
3 0

Answer: None of the above

Explanation: f the relative price of one unit of good y is 0.25 units of good z, it means that

P_{y} = 0.25 * P_{z}

Out of the given options none satisfy this condition, for

a. P_{y} = 0.25 * P_{z}

P_{y}  = 0.25 (4000) = 1000 \neq 2000

b. P_{y} = 0.25 * P_{z}

P_{y}  = 0.25 (1000) = 250 \neq 2000

c. P_{y} = 0.25 * P_{z}

P_{y}  = 0.25 (2000) = 500 \neq 1000

Therefore, none of the above options satisfy the relative price equation.

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