Relative price

Question

if the relative price of one unit of good x is 5 units of good y, then it follows that the absolute price of good x can be _ and the absolute price of good y can be _

 

Its economics but I'm confused and I've been looking through the textbook. I have the answer but idk how to get to the answer.

Answer 1

Relative price is making an apples-to-apples comparison by putting the value of goods in terms of other goods. For example, if an orange costs $1 and a pear costs $2, you can buy 2 oranges or 1 pear for $2. Therefore, the relative price of 1 pear is 2 oranges (with equal money, you can afford 1 pear or 2 oranges). In the question above, it is telling you that with the same amount of money, you can buy 1 unit or good x or 5 units of good y. Therefore, good x costs 5 times more than good y. Thus some possible prices are:

 

Px      Py

$5      $1

$10    $2

$150  $30

etc.