Suppose there are only two goods: guns and roses.If the relative price of guns falls,then the relative price of roses

Question

Quizplus · Accepted Answer

If the relative price of guns falls, it means that guns have become relatively cheaper compared to roses. As a result, consumers would demand more guns as they are now relatively cheaper, and they would demand fewer roses as they are now relatively more expensive. This increased demand for guns and decreased demand for roses would lead to an increase in the relative price of roses, making them relatively more expensive compared to guns. Therefore, the answer is that the relative price of roses must rise.

Suppose There Are Only Two Goods: Guns and Roses