Question

Suppose that the price of cornflakes is $6.75 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Answer 1

Answer:

The relative price of cornflakes in terms of oatmeal is 1.50.

Step-by-step explanation:

The price of cornflakes is $6.75 per box and the price of oatmeal is $4.50 per box.

A relative price is defined as the price of a commodity in terms of another.

Therefore, the relative price of cornflakes in terms of oatmeal is $\frac{6.75}{4.50}$ = 1.50