Assume an economy produces only hamburgers and hotdogs and the base year is 2005. $$\begin{array} { l c c c c }
&&{ \text { Quantities Produced } } & & { \text { Prices } } \
& \underline { 2005 } & \underline { 2006 } & \underline { 2005 } & \underline { 2006 } \
\text { Hamburgers } & 2,000 & 3,000 & \$ 2 & \$ 3 \
\text { Hotdogs } & 3,000 & 4,000 & \$ 1 & \$ 1.50
\end{array}$$ Given the data in the table above, what is the value of real GDP in 2006?

Question

Assume an economy produces only hamburgers and hotdogs and the base year is 2005. $$\begin{array} { l c c c c } 
&&{ \text { Quantities Produced } } & & { \text { Prices } } \
& \underline { 2005 } & \underline { 2006 } & \underline { 2005 } & \underline { 2006 } \
\text { Hamburgers } & 2,000 & 3,000 & \$ 2 & \$ 3 \
\text { Hotdogs } & 3,000 & 4,000 & \$ 1 & \$ 1.50
\end{array}$$ Given the data in the table above, what is the value of real GDP in 2006?

Quizplus · Accepted Answer

Real GDP in 2006 is calculated using the quantities from 2006 and the prices from the base year 2005. For hamburgers: 3,000 * $2 = $6,000. For hotdogs: 4,000 * $1 = $4,000. Total real GDP = $6,000 + $4,000 = $10,000.

Assume an Economy Produces Only Hamburgers and Hotdogs and the Base