There are two goods in the economy,apples and bread.The relative price of apples has increased.This could be due to
A) an increase in the absolute price of apples,ceteris paribus.
B) a decrease in the absolute price of bread,ceteris paribus.
C) a decrease in the absolute price of apples,ceteris paribus.
D) an increase in the absolute price of bread,ceteris paribus.
E) a and b

Question

Quizplus · Accepted Answer

The relative price of apples increases either if the price of apples goes up (A) or if the price of bread goes down (B), holding other factors constant (ceteris paribus). Both scenarios would make apples more expensive relative to bread.

There Are Two Goods in the Economy,apples and Bread