2012 2013 Product Quantity Price Quantity Price Sweatshirts 50 $35.00 55 $38.00 Dental examinations 50 $75.00 60 $42.00 Coffee drinks 1,000 $4.00 1,200 $4.50 Refer to the table above. Suppose that a simple economy produces only three goods and services: sweatshirts, dental examinations and coffee drinks. Assume 2012 is the base year. Using the information in the above table, real GDP in 2013 equals O $8,080 O $11,225 O $8,500 O $9,170 O $10,010
2012 2013 Product Quantity Price Quantity Price Sweatshirts 50 $35.00 55 $38.00 Dental examinations 50 $75.00 60 $42.00 Coffee drinks 1,000 $4.00 1,200 $4.50 Refer to the table above. Suppose that a simple economy produces only three goods and services: sweatshirts, dental examinations and coffee drinks. Assume 2012 is the base year. Using the information in the above table, real GDP in 2013 equals O $8,080 O $11,225 O $8,500 O $9,170 O $10,010
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The image provides data for calculating real GDP using 2012 as the base year. It includes information on three products: sweatshirts, dental examinations, and coffee drinks. For each product, it lists the quantity and price for the years 2012 and 2013.
**2012**
- **Sweatshirts:** Quantity: 50, Price: $35.00
- **Dental examinations:** Quantity: 50, Price: $75.00
- **Coffee drinks:** Quantity: 1,000, Price: $4.00
**2013**
- **Sweatshirts:** Quantity: 55, Price: $38.00
- **Dental examinations:** Quantity: 60, Price: $42.00
- **Coffee drinks:** Quantity: 1,200, Price: $4.50
To calculate the real GDP for 2013, use 2012 prices:
1. **Sweatshirts:** 55 x $35.00 = $1,925
2. **Dental examinations:** 60 x $75.00 = $4,500
3. **Coffee drinks:** 1,200 x $4.00 = $4,800
Adding these amounts gives the real GDP for 2013:
Real GDP = $1,925 + $4,500 + $4,800 = $11,225
The correct answer is therefore the second option: $11,225.
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