based on the table above, which of the following is true?\na. the money prices of both goods increased, the…

based on the table above, which of the following is true?\na. the money prices of both goods increased, the relative price of hospital rooms decreased, and the relative price of hotel suites increased\nb. the money prices of both goods increased and the relative prices of both goods decreased\nc. the money prices of both goods increased and the relative prices of both goods increased\nd. the money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased\nmoney prices\n2003 2004\nhospital room (1 day) $200 $225\nhotel suite (1 night) $300 $325

based on the table above, which of the following is true?\na. the money prices of both goods increased, the relative price of hospital rooms decreased, and the relative price of hotel suites increased\nb. the money prices of both goods increased and the relative prices of both goods decreased\nc. the money prices of both goods increased and the relative prices of both goods increased\nd. the money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased\nmoney prices\n2003 2004\nhospital room (1 day) $200 $225\nhotel suite (1 night) $300 $325

Answer

Explanation:

Step1: Calculate initial relative price of hospital room

Relative price of hospital room in 2003 = $\frac{200}{300}=\frac{2}{3}\approx0.67$

Step2: Calculate initial relative price of hotel suite

Relative price of hotel suite in 2003 = $\frac{300}{200} = 1.5$

Step3: Calculate new relative price of hospital room

Relative price of hospital room in 2004 = $\frac{225}{325}=\frac{9}{13}\approx0.69$

Step4: Calculate new relative price of hotel suite

Relative price of hotel suite in 2004 = $\frac{325}{225}=\frac{13}{9}\approx1.44$

Step5: Analyze price - changes

Money prices of hospital room ($200$ to $225$) and hotel suite ($300$ to $325$) increased. Relative price of hospital room increased from $\frac{2}{3}$ to $\frac{9}{13}$, relative price of hotel suite decreased from $1.5$ to $\frac{13}{9}$.

Answer:

D. The money prices of both goods increased, the relative price of hospital rooms increased, and the relative price of hotel suites decreased