Gorgonzola is a small island nation with a simple economy that produces only six goods: sugar cane, yo-yos, rum, peanuts, harmonicas, and peanut butter. Assume that half of all sugar cane is used to produce rum, and one-fifth of all the peanuts are used to produce peanut butter. Use the production and price information in the table to calculate real GDP for 2013, 2014, and 2015 using 2014 as the base year. What is the growth rate of real GDP from 2013 to 2014 and from 2014 to 2015?
Gorgonzola is a small island nation with a simple economy that produces only six goods: sugar cane, yo-yos, rum, peanuts, harmonicas, and peanut butter. Assume that half of all sugar cane is used to produce rum, and one-fifth of all the peanuts are used to produce peanut butter. Use the production and price information in the table to calculate real GDP for 2013, 2014, and 2015 using 2014 as the base year. What is the growth rate of real GDP from 2013 to 2014 and from 2014 to 2015?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Gorgonzola is a small island nation with a simple economy that produces only six goods: sugar cane, yo-yos, rum, peanuts, harmonicas, and peanut butter. Assume that half of all sugar cane is used to produce rum, and one-fifth of all the peanuts are used to produce peanut butter. Use the production and price information in the table to calculate real
Transcribed Image Text:The table below presents data on the quantity and price of various products over a three-year period from 2013 to 2015. The products listed include sugar cane, yo-yos, rum, peanuts, harmonicas, and peanut butter.
| Product | 2013 Quantity | 2013 Price | 2014 Quantity | 2014 Price | 2015 Quantity | 2015 Price |
|----------------|---------------|------------|---------------|------------|---------------|------------|
| Sugar cane | 240 | $0.80 | 240 | $1.00 | 300 | $1.15 |
| Yo-yos | 600 | $2.50 | 700 | $3.00 | 750 | $4.00 |
| Rum | 150 | $10.00 | 160 | $12.00 | 180 | $15.00 |
| Peanuts | 500 | $2.00 | 450 | $2.50 | 450 | $2.50 |
| Harmonicas | 75 | $25.00 | 75 | $30.00 | 85 | $30.00 |
| Peanut butter | 100 | $4.50 | 85 | $4.50 | 85 | $5.00 |
**Description:**
- **Sugar cane:** The quantity remained constant from 2013 to 2014, but increased in 2015. Prices rose each year.
- **Yo-yos:** Quantities increased each year, as did the prices.
- **Rum:** Quantities and prices both increased steadily over the three years.
- **Peanuts:** There was a decrease in quantity from 2013 to 2014, with no change in 2015. Prices increased in 2014 and remained stable in 2015.
- **Harmonicas:** Quantity remained constant in the first two years with moderate increase in 2015. Prices increased in 2014 and remained stable in 2015.
- **Peanut butter:** The quantity decreased from 2013 to 2014 and remained stable in 2015. Prices remained stable from 2013 to 2014 and increased in 2015.
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