Suppose that the residents of Windhoek spend all of their income on cauliflower, broccoli and carrots. In 2019 they buy 100 heads of cauliflower for N$2000, 50 bunches of broccoli for N$750 and 500 carrots for N$500. In 2020 they buy 75 heads of Cauliflower for N$2250, 80 bunches of broccoli for N$1200 and 500 carrots for N$1000. Suppose that the base year is 2019. (a) Find nominal GDP and real GDP for 2019 and 2020. (4) (b) What is the CPI in both years? (6) (c) What is the inflation rate? ( 4)

Suppose that the residents of Windhoek spend all of their income on cauliflower, broccoli and carrots. In 2019 they buy 100 heads of cauliflower for N$2000, 50 bunches of broccoli for N$750 and 500 carrots for N$500. In 2020 they buy 75 heads of Cauliflower for N$2250, 80 bunches of broccoli for N$1200 and 500 carrots for N$1000. Suppose that the base year is 2019. (a) Find nominal GDP and real GDP for 2019 and 2020. (4) (b) What is the CPI in both years? (6) (c) What is the inflation rate? ( 4)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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Question

Suppose that the residents of Windhoek spend all of their income on cauliflower,

broccoli and carrots. In 2019 they buy 100 heads of cauliflower for N$2000, 50 bunches

of broccoli for N$750 and 500 carrots for N$500. In 2020 they buy 75 heads of

Cauliflower for N$2250, 80 bunches of broccoli for N$1200 and 500 carrots for N$1000.

Suppose that the base year is 2019.

(a) Find nominal GDP and real GDP for 2019 and 2020. (4)

(b) What is the CPI in both years? (6)

(d) Find real growth rate (2)

(e) Which do you think has a greater effect on the CPI: a 10 percent increase in the

price of chicken or a 10 percent increase in the price of cars? Why? (4)

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Answer ala part please sir
What is it mean by full price and income when discussing household consumption?
10
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