Homework Answers
Real GDP is the value of GDP at some base year prices.
Real GDP in year 2= Price in year 1 x Quantity in year 2
Real GDP in year 2= $10 x 120 + $10 x 0 + $15 x 220
Real GDP in year 2= $1200 + 0 + $3300
Real GDP in year 2= $4500
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Suppose that the British economy produces two goods: laptops and books. The quantity produced and the...
Suppose that the British economy produces two goods: laptops and
books. The quantity produced and the prices of these items for 2015
and 2016 are shown in the table below: Year Quantities produced
Price ($) 2015 Laptops =50 Books =1,000 Laptops =200 Books = ? 2016
Laptops =100 Books =? Laptops =150 Books =10
Suppose that the British economy produces two goods: laptops and books. The quantity produced and the prices of these items for 2015 and 2016 are shown...
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3. (12 points) Suppose there are only two goods in the economy, namely goods A and goods B. Using 2014 as base year and...
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1. Suppose that a simple economy produced only three goods: wheat, automobiles, and chairs. The table...
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Suppose Latasha gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Latasha is her time. As she gives more haircuts, Latasha must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives...
3. (12 points) Suppose there are only two goods in the economy, namely goods A and goods B. Using 2014 as base year and fix the basket as the quantity in 2014, calculate the CPI in 2015 and the inflation rate by CPI in 2015. Table 2: Prices and Quantities 2014 2015 A B Price Quantity Price $31 1000 $ 36 $ 102 200 $ 100 Quantity 1050 205
Suppose that the British economy produces two goods: laptops and books. The quantity produced and the prices of these items for 2015 and 2016 are shown in the table below: Year 2015 Quantities produced Laptops = 60 Books – see Laptops = 70 Books = ? Price ($) Laptops = 200 Books ? Laptops - 120 Books = 8 2016 Instructions: Round your answer to two decimal places a. Let's assume that the base year was 2015, so that real...
Suppose that the British economy produces two goods: laptops and
books. The quantity produced and the prices of these items for 2015
and 2016 are shown in the table below: Year Quantities produced
Price ($) 2015 Laptops =50 Books =1,000 Laptops =200 Books = ? 2016
Laptops =100 Books =? Laptops =150 Books =10
Suppose that the British economy produces two goods: laptops and books. The quantity produced and the prices of these items for 2015 and 2016 are shown...
1. Suppose that a simple economy produced only three goods: wheat, automobiles, and chairs. The table below lists the quantity and prices for each of the goods for year 2000 and 2010. Based on table, answer the following questions (7.8 total points): Price in 2000 Wheat Automobiles Chairs Quantity produced in 2000 100 200 400 $5 $40,000 $10 a) Calculate nominal GDP in year 2000. 5 points) b) Suppose prices doubled by 2010 but production stayed the same. Calculate the...
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