Answer the question(s)below based on the information in the following table
Country
$$\begin{array} { | c | c | c | }
\hline \text { Goods } & \mathrm { A } & \mathrm { B } \
\hline \mathrm { X } & 3 & 9 \
\hline \mathrm { Y } & 4 & 2 \
\hline
\end{array}$$ (numbers indicate hours of labor per unit of output)
-Refer to the table above.The relative price of beer in terms of wine in B is
A)$4.50.
B)2.
C)4.5.
D)$2.00.

Question

Answer the question(s)below based on the information in the following table
Country
 $$\begin{array} { | c | c | c | } 
\hline \text { Goods } & \mathrm { A } & \mathrm { B } \
\hline \mathrm { X } & 3 & 9 \
\hline \mathrm { Y } & 4 & 2 \
\hline
\end{array}$$ (numbers indicate hours of labor per unit of output)
-Refer to the table above.The relative price of beer in terms of wine in B is
A)$4.50.
B)2.
C)4.5.
D)$2.00.

Quizplus · Accepted Answer

The relative price of one good in terms of another is found by comparing the opportunity costs of producing those goods in a given country. In country B, it takes 9 hours to produce one unit of X and 2 hours to produce one unit of Y. Therefore, the opportunity cost of producing one unit of X in terms of Y is 9/2 = 4.5. This means the relative price of X (let's assume X is beer and Y is wine for the purpose of this question) in terms of Y in country B is 4.5, indicating that one unit of X costs 4.5 units of Y.

Answer the Question(s)below Based on the Information in the Following