Suppose that at first the price of a bag of coffee is $15 and the price of a box of tea is $9. Then, the price of a bag of coffee changes to $30 and the price of a box of tea changes to $21. What has happened the money prices and relative prices of these two goods?
What will be an ideal response?
Answer:
The money price of a bag of coffee and a box of tea have risen and the relative price of a bag of coffee has fallen while relative price of a box of tea has risen.