Question

The relative price of any commodity is its price in terms of A. dollars. B. foreign currencies. C. another commodity. D. gold.

Answer 1

The Correct Answer is C

Another commodity

Step-by-step explanation:

• The proportion of one value to another is designated a relative price, which is an opportunity cost.
• The relative price of an asset is the opportunity cost of obtaining that asset because it determines how much of the next most suitable asset must be relaxed up to purchase a unit of the first asset.
• A relative price is an opportunity cost.

Answer 2

Answer: option (C) another commodity.

Explanation: The relative price of any commodity is its price in terms of another commodity. A relative price maybe expressed in terms of ratio between the prices of any two goods. Relative price simply refers to the ratio of prices. They are often expressed in terms of consumer price indices and are pertinent in making international comparison. Consumers are conscious of monetary prices of product but most have the intuition that the really important thing is the price of product to other prices such as the wage rate.