Question

Suppose that Glitter Gulch, a gold mining firm, increased its sales revenues on newly mined gold from $100 million to $200 million between one year and the next. Instructions: Enter your answers as whole numbers. a. Assuming that the price of gold increased by 100 percent over the same period, by what numerical amount did Glitter Gulch's real output change? s 300 millions b. If the price of gold had not changed, what would have been the change in Glitter Gulch's real output? million

Answer 1

l o Rail GDP - (guantity) (Bade Year Price). I In calculation of Real Epp, base year price remains unchanged. So, if there is any change is in Real GDP , then this would be entirely from the change in gyughty. Total Revenue = (Juanhuby) (Price). Company revenue increase from diw billion to $20 bilhen e, increase in revence of 100) and the price of gold went up by 10%. It mean entire increude in total revenue is due to increase in price. rs So, there is no change in guachty produce at the Since there is no change in guughty produce a change in Real GDP will be zero. Answer: do bmillim. Reil out but change to million 6. If there is no change in price, then the doubling of revenue implies douthing of guanhly Doubling the grantly produce implica real out but of the torty wantry doubled. Hence, alter Gulch's real ou that change it $100 billion million Answori & 100 million