Suppose that in 1994 the total output in a single-good economy was 10,000 buckets of chicken. Also suppose that in 1994 each bucket of chicken was priced at $10. Finally, assume that in 2015 the price per bucket of chicken was $20 and that 25,000 buckets were produced. Instructions: In parts a-b, enter your answer rounded to 1 decimal place. In part c, enter your answers as a whole number. a. What is the GDP price index for 1994, using 2015 as the base year? 62.5 x b. What were the amounts of real GDP in 1994 and 2015? In 1994, real GDP = $ 100000 x In 2015, real GDP = $ 352000

Suppose that in 1994 the total output in a single-good economy was 10,000 buckets of chicken. Also suppose that in 1994 each bucket of chicken was priced at $10. Finally, assume that in 2015 the price per bucket of chicken was $20 and that 25,000 buckets were produced. Instructions: In parts a-b, enter your answer rounded to 1 decimal place. In part c, enter your answers as a whole number. a. What is the GDP price index for 1994, using 2015 as the base year? 62.5 x b. What were the amounts of real GDP in 1994 and 2015? In 1994, real GDP = $ 100000 x In 2015, real GDP = $ 352000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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To answer Questions #1 through #4 use the following information: Suppose that in the nation state of Raleighville there are 2 final goods produced in the economy - dog food and kitten chow. Suppose the economy produces 15 units of dog food and 5 units of kitten chow in 2000 (the base year), and 20 units of dog food and 10 units of kitten chow in 2020. Further suppose the price of dog food was $1.00 per unit in 2000, and $3.00 per unit in 2020; whereas the price of kitten chow was $1.00 in 2000 and $2.50 in 2020. What was the real GDP for Raleighville in 2020? Oa. $20.00 O b. $30.00 Oc. $57.50 Od. $85.00 Next page page
To answer Questions #1 through #4 use the following information: Suppose that in the nation state of Raleighville there are 2 final goods produced in the economy - dog food and kitten chow. Suppose the economy produces 15 units of dog food and 5 units of kitten chow in 2000 (the base year), and 20 units of dog food and 10 units of kitten chow in 2020. Further suppose the price of dog food was $1.00 per unit in 2000, and $3.00 per unit in 2020; whereas the price of kitten chow was $1.00 in 2000 and $2.50 in 2020. What was the real GDP for Raleighville in 2000? O a. $20.00 O b. $30.00 O c. $57.50 O d. $85.00 Next page
The table below shows the price of inputs and the price of outputs at each step in the production process of making a shirt. Assume that each of these steps takes place within the country. Inputs Value of output Cotton Farmer $0 $1.55 Fabric Maker $1.55 Sewing and Printing $3.65 $3.65 $18.20 Instructions: Round your answers to two decimal places. a. Using the standard expenditure method, the total contribution of this shirt to GDP is: b. If we use a value-added method (i.e., summing the value added by producers at each step of the production process, equal to the value of output minus the price of inputs), the contribution of this shirt to GDP is: c. If we mistakenly added the price of both intermediate inputs and final outputs without adjusting for value added, we would find that this shirt contributes: to GDP This overestimates the true contribution by: $
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In the first quarter of 2020, US real GDP declined about 9%, due to the economics shocks from the Covid 19 virus. If prices were completely flexible, and this means all prices, both inputs (such as labor), as well as output prices, what would you think would have been the drop in GDP? If prices are completely fixed, would the drop in GDP be greater or less than the flexible case? Why? If the Expenditure method of accounting for GDP, has to equal the Income Side, and the economy overproduces a particular item, say automobiles, the income side will also be higher, workers will buy the extra cars with extra income and the economy can gyrate indefinitely higher? Why or why not?
So far, we have learned to measure real GDP, but how do we end up with that real GDP? Of all of the different amountsof national income and price levels that might exist, how do we gravitate toward the one that gets measured each year asreal GDP?In short, it is the interaction of the buyers and producers of all output that determines both the national income (real GDP)and the price level. In other words, the intersection of aggregate demand (AD) and short-run aggregate supply (SRAS)determines the short-run equilibrium output and price level.Once we have a short-run equilibrium output, we can then compare it to the full employment output to figure out where inthe business cycle we are. If current real GDP is less than full employment output, an economy is in a recession. If currentreal GDP is higher than full employment output, an economy is experiencing a boom. If the current output is equal to thefull-employment output, then we say that the economy is in long-run equilibrium. The…
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Laptops 2010 2011 2012 Price $1,700 $1,400 $1,200 Complete the following table by calculating nominal GDP and real GDP (using 2010 as the base year) for each year. (Enter your responses as integers.) 2010 2011 2012 Quantity 7 9 9 Textbooks Price Quantity $180 $190 6 8 $210 9 Nominal GDP $ 13,040 $ 14,260 $ 12,850 Using the chain-weighted method outlined above, real GDP for 2011 is $ 16,810. (Round your response to the nearest dollar.) Using the chain-weighted method again, real GDP for 2012 is $ (Round your response to the nearest dollar.) Energy Drinks Price Quantity $2 30 $4 35 $4 40 Real GDP (2010 Base) $ 13,040 $ 16,810 $ 17,000
Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburgers, shirts, and cotton. Further, assume that all of the cotton is used to produce shirts. 2012 Statistics Quantity Product Shoes 110 120 Hamburgers 85 120 Shirts 50 30.00 50 Cotton 11,000 0.09 10,000 a. If the base year is the year 2012, then real GDP for 2022 equals $ Price $55.00 3.00 2022 Statistics Quantity 2023 Statistics Quantity Price $75.00 3.50 25.00 0.07 Price $70.00 120 3.00 135 25.00 65 0.08 11,000 (round your answer to the nearest penny)