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Answer:
 (b) 1 foot = 3/8 inch
Explanation:
The given ratio is ...
 actual : scale = 4" : 1/8"
You know that 1 foot = 12 in = 3×4 in, so you can multiply the above ratio by 3 to see what it is for 1 foot.
 actual : scale = 3×4" : 3×1/8"
 = 12" : 3/8"
 = 1 foot : 3/8 in
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Alternate approach
Essentially, we're saying that the ratios between actual measures and those on a scaled drawing or model form a proportion.
 scale / actual = (1/8")/(4 in) = ??/(12 in)
Multiplying by 12 in, we get ...
 ?? = (12 in)(1/8")/(4 in) = 3×1/8"
 ?? = 3/8"
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More detail
Notice that this only works when the units in the ratio (12 in)/(4 in) cancel to give a pure number 12/4 = 3.
If we had put 1 foot in the proportion, then we would end up with ?? being expressed in feet, not inches:
 (1/8")/(4") = ??/(1 ft)
 ?? = (1 ft)(1/8")/(4") = (1 ft)(1/32) = 1/32 ft
Then, to find the answer to the question, we would have to find out how many inches is 1/32 ft.
 1/32 ft = (1/32)(12 in) = 12/32 in = 3/8 in
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End comment
For best results, the units in corresponding parts of a proportion should be the same.