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Table: Three-Good Economy II Product Quantity (2008) Price (2008) Quantity (2009

ID: 1162768 • Letter: T

Question

Table: Three-Good Economy II Product Quantity (2008) Price (2008) Quantity (2009) Price (2009) Computers Pizzas Burgers 30 100 200 $1,000 10 200 28 150 210 $995 15 20 Reference: Ref 6-5 (26-5) (Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If 2008 prices are used in the calculation of real GDP, then nominal GDP in 2009 is and real GDP in 2009 is $34,310; $33,700 $35,350; $34,310 $33,700; $35,000 $35,000; $33,700

Explanation / Answer

1) Solution: 34,310; 33,700

Working:

Quantity

Price

Nominal GDP

Computers

28

995

27860

Pizza

150

15

2250

Burgers

210

20

4200

34310

Quantity

Price

Real GDP

Computers

28

1000

28000

Pizza

150

10

1500

Burgers

210

20

4200

33700

?

2) Solution: The social security program sends a monthly payment to a senior citizen

Explanation: Transfer payments do not require a good or service in exchange such as pension payment; social security payments

Quantity

Price

Nominal GDP

Computers

28

995

27860

Pizza

150

15

2250

Burgers

210

20

4200

34310

Quantity

Price

Real GDP

Computers

28

1000

28000

Pizza

150

10

1500

Burgers

210

20

4200

33700