The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2014, the pay phone costs 50 cents for a call and a first-class stamp costs 49 cents. We know that
A)both the nominal and the relative price of phone calls increased from 1950 to 2014.
B)both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2014.
C)all prices increased from 1950 to 2014: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps.
D)both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but we can't tell if the relative prices increased or decreased without more information.

Question

Quizplus · Accepted Answer

The nominal prices of phone calls and first-class stamps increased from 1950 to 2014. However, the relative price of stamps increased because they cost more compared to the cost of a phone call in 1950, while the relative price of phone calls decreased because they cost less compared to the cost of a stamp in 2014.

The Price of a Phone Call at a Pay Phone