Product Quantity(2013) Price (2013) Quantity (2018) Price (2018) Pizzas 100 $10 120 $12 Haircuts 50 15 45 20 Backpacks 200 40 210 45 Refer to Table 8-22. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. a. Use the information to compute real GDP in the year 2013 and 2018. Assume that 2013 is the base year. Is output higher in 2018 or 2013? Why? Briefly explain. b. Use the information to compute nominal GDP in the year 2013 and 2018. Is the price level in the economy higher in 2018 or 2013? Why?
Product Quantity(2013) Price (2013) Quantity (2018) Price (2018) Pizzas 100 $10 120 $12 Haircuts 50 15 45 20 Backpacks 200 40 210 45 Refer to Table 8-22. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above. a. Use the information to compute real GDP in the year 2013 and 2018. Assume that 2013 is the base year. Is output higher in 2018 or 2013? Why? Briefly explain. b. Use the information to compute nominal GDP in the year 2013 and 2018. Is the price level in the economy higher in 2018 or 2013? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Table 8-22
2013 2018
| Product | Quantity(2013) | Price (2013) | Quantity (2018) | Price (2018) |
| Pizzas | 100 | $10 | 120 | $12 |
| Haircuts | 50 | 15 | 45 | 20 |
| Backpacks | 200 | 40 | 210 | 45 |
Refer to Table 8-22. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2013 and 2018 are shown in the table above.
a. Use the information to compute real GDP in the year 2013 and 2018. Assume that 2013 is the base year. Is output higher in 2018 or 2013? Why? Briefly explain.
b. Use the information to compute nominal GDP in the year 2013 and 2018. Is the price level in the economy higher in 2018 or 2013? Why?
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