The relative price .

Question

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Answer 1

Question

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

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Answer

M” method Given the following model, solve by the method of “M”. (see image)

As indicated in the attached image, U.S. earnings for high- and low-skill workers as measured by educational attainment began diverging in the 1980s. The remaining questions in this problem set use the model for the labor market developed in class to walk through potential explanations for this trend. 1. Assume that there are just two types of workers, low- and high-skill. As a result, there are two labor markets: supply and demand for low-skill workers and supply and demand for high-skill workers. Using two carefully drawn labor-market figures, show that an increase in the demand for high skill workers can explain an increase in the relative wage of high-skill workers. 2. Using the same assumptions as in the previous question, use two carefully drawn labor-market figures to show that an increase in the supply of low-skill workers can explain an increase in the relative wage of high-skill workers.

Answer 2

Question

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

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Answer 3

Question

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

Answer 6

Chapter 3, Problem 1SPA

To determine

The relative price.

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.

Economics Concept Introduction

Money price: Money price is known as the price of a good in dollar terms.

Relative price: Relative price is known as the price of one good expressed as ratio of another good.

Answer 7

Chapter 3, Problem 1SPA

To determine

The relative price.

Answer 8

Expert Solution & Answer

Explanation of Solution

Given information:

It is given that the money price of a carton of milk is $2.01 and a gallon of gasoline is $3.63.

The relative price is the ratio of the price of a commodity expressed in terms of another commodity. The relative price of gallon in terms of milk can be calculated using the equation (1).

Relative price of gasoline=Money price of gasoline Money price of milk (1)

Substitute the respective values in equation (1), the relative price of gasoline in terms of milk.

Relative price of gasoline=3.63 2.01=1.81

Thus, the relative price of gasoline in terms of milk is $1.81.