Page 550 1. Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy's GDP in year 1? What was its GDP in year 2?
Page 550 1. Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2 bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy's GDP in year 1? What was its GDP in year 2?
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Production And Growth
Section: Chapter Questions
Problem 5CQQ
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![Page 550
1. Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of
shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2
bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice
cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy's GDP in
year 1? What was its GDP in year 2?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb022cb95-7be6-4190-9010-3f028cf21377%2Fc953ee01-1fb5-45dd-b9b8-af26c3b16c16%2Fj8e26dq_processed.png&w=3840&q=75)
Transcribed Image Text:Page 550
1. Suppose that annual output in year 1 in a 3-good economy is 3 quarts of ice cream, 1 bottle of
shampoo, and 3 jars of peanut butter. In year 2, the output mix changes to 5 quarts of ice cream, 2
bottles of shampoo, and 2 jars of peanut butter. If the prices in both years are $4 per quart for ice
cream, $3 per bottle of shampoo, and $2 per jar of peanut butter, what was the economy's GDP in
year 1? What was its GDP in year 2?
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GDP is the value of total output produced in a economy in an accounting year withing the boundary of it's territory.
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