Consider a simple economy that produces two goods: pencils and erasers. The following table shows the prices and quantities of the goods over a three- year period. Year 2008 2009 2010 Year 2008 2009 2010 Pencils Price (Dollars per pencil) 1 2 3 Quantity (Number of pencils) 150 135 110 Use the information from the previous table to fill in the following tale. GDP Real GDP (Dollars) (Base year 2008, dollars) Price (Dollars per eraser) 2 4 Erasers 4 Quantity (Number of erasers) 160 230 165
Consider a simple economy that produces two goods: pencils and erasers. The following table shows the prices and quantities of the goods over a three- year period. Year 2008 2009 2010 Year 2008 2009 2010 Pencils Price (Dollars per pencil) 1 2 3 Quantity (Number of pencils) 150 135 110 Use the information from the previous table to fill in the following tale. GDP Real GDP (Dollars) (Base year 2008, dollars) Price (Dollars per eraser) 2 4 Erasers 4 Quantity (Number of erasers) 160 230 165
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider a simple economy that produces two goods: pencils and erasers. The following table shows the prices and quantities of the goods over a three-
year period.
Year
2008
2009
2010
Year
2008
2009
2010
Price
(Dollars per pencil)
1
Pencils
3
From 2009 to 2010, GDP
Quantity
(Number of pencils)
150
135
110
Use the information from the previous table to fill in the following tavle.
GDP
Real GDP
(Dollars) (Base year 2008, dollars)
and real GDP
Price
(Dollars per eraser)
2
Erasers
4
4
Quantity
(Number of erasers)
160
230
165
Why is real GDP a more accurate measure of an economy's production than GDP?
Real GDP is not influenced by price changes, but GDP is.
Real GDP includes the value of exports, but GDP does not.
Real GDP measures the value of the goods and services an economy produces, but GDP measures the value of the goods and services an
economy consumes.
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