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Question

51) The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

A) increased from 0.25 to 0.6.

B) decreased from 4.0 to 3.0.

C) stayed constant at 0.25.

D) stayed constant at 4.0.

52) If we are comparing the price of regular gasoline with the price of super gasoline, then an increase in the relative price of regular gasoline implies that

A) the nominal price of regular gasoline increased.

B) the nominal price of super gasoline decreased.

C) the relative price of super gasoline decreased.

D) the relative price of regular gasoline increased.

53) The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook

A) increased from 3 to 4.5.

B) decreased from 0.8 to 0.67.

C) decreased from 3 to 2.5.

D) remained constant.

54) The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?

A) It increased by 5 percent.

B) It increased, but we can't tell by how much without more information.

C) It decreased by 5 percent.

D) It decreased, but we can't tell by how much without more information.

55) The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

A) the quantity demanded of the used textbook to increase and the quantity demanded of the new textbook to decrease.

B) the quantity demanded of both to fall.

C) the demand for the new textbook to increase and the demand for the used textbook to decrease.

D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

56) The price of a new car is $40,000 while the price of a five-year old car of the same brand is $16,000. The next year the price of the new car increases to $44,000 and the price of a five-year old car of the same brand is $17,600. The relative price of the used car

A) decreased by $2,400.

B) decreased by 10 percent.

C) increased by 10 percent.

D) remained constant at 0.4.

57) The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of butter is ________.

A) 0.5; 0.8.

B) 0.5; 1.25.

C) 2.0; 1.25.

D) 2.0; 0.8.

58) The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2. What is the relative price of bread to butter?

A) 1.39

B) 0.6

C) 0.72

D) 0.50

59) An increase in the relative price of a good cannot be caused by

A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good.

B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good.

C) a decrease in the nominal price of the other good while the price of the good itself remains constant.

D) an increase in the nominal price of the other good while the price of the good itself remains constant.

60) The relative price of a textbook is

A) the money price of the textbook divided by the money price of some other good.

B) the price of the textbook compared with what students think it should cost.

C) the amount it cost to make the textbook.

D) what the author earned for writing the textbook.