We are told that \( \frac{1}{2} \in S \), and the set is closed under the following operations: \[ \text{If } x \in S, \text{ then } \frac{1}{x+1} \in S \quad \text{and} \quad \frac{x}{x+1} \in S \] Let’s explore how the operations behave in the interval \( 0<x<1 \): Let \( x = \frac{1}{2} \). Then:
\(\frac{1}{x+1} = \frac{1}{\frac{3}{2}} = \frac{2}{3} \in S\)
\(\frac{x}{x+1} = \frac{\frac{1}{2}}{\frac{3}{2}} = \frac{1}{3} \in S\) Now repeat the process with \( \frac{2}{3} \): \[ \frac{1}{\frac{2}{3} + 1} = \frac{1}{\frac{5}{3}} = \frac{3}{5} \in S, \quad \frac{\frac{2}{3}}{\frac{5}{3}} = \frac{2}{5} \in S \] Similarly, for every \( 0<x<1 \), repeated applications of the transformations produce other values in that interval. Therefore, \( S \) includes all rational numbers in \( (0,1) \).
\[ {S \text{ contains all rational numbers in } (0, 1)} \]