To determine how much taller the cat is than the dragon, we need to subtract the height of the dragon from the height of the cat.
The height of the dragon is \( \frac{1}{2} \) inch, and the height of the cat is \( \frac{7}{8} \) inch.
To perform the subtraction, we can first convert \( \frac{1}{2} \) into a fraction with a denominator of 8, so that both fractions can be easily compared.
\[ \frac{1}{2} = \frac{4}{8} \]
Now we can subtract the height of the dragon from the height of the cat:
\[ \frac{7}{8} - \frac{4}{8} = \frac{3}{8} \]
Thus, the cat is \( \frac{3}{8} \) inch taller than the dragon.
The correct response is:
3 8 in.