The number 1 represents the entire book. Since Ralph has read 1/8 of his book, what is left to read is:
1 - (1/8). In order to do the subtraction the number 1 needs to be represented as a fraction with the same denominator as 1/8. That would be 8/8.
So the operation to perform is 8/8 - 1/8 = 7/8, i.e. to add or subtract fractions having a common denominator, add or subtract the numerators keeping the denominator the same.
Picture a block of wood divided into 8 cubes of equal size. Each block is 1/8 of the whole. Take away one of the blocks and you have 7 blocks left over.