Table 12-10
Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 12-10.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Question

Table 12-10
  Consider the data shown above for Vicuna,a country that produces only two products: oranges and shirts.
-Refer to Table 12-10.Real GDP for Vicuna for 2009 using 2011 as the base year equals

Quizplus · Accepted Answer

To calculate Real GDP using 2011 as the base year, we need to multiply the quantities of each product produced in every year by their respective prices in 2011. This gives us the following calculations:
- 2009: (100 x $25) + (200 x $17) = $2,500 + $3,400 = $5,900
- 2010: (110 x $27) + (250 x $18) = $2,970 + $4,500 = $7,470
- 2011: (120 x $30) + (300 x $20) = $3,600 + $6,000 = $9,600

Then, we need to chain the values to 2011, using the following formula:
(Real GDP in current year / Price index in current year) x Price index in base year

Using this formula, we get the following calculations:
- 2009: ($5,900 / 110.5) x 100 = $5,338.91
- 2010: ($7,470 / 117.8) x 100 = $6,347.82
- 2011: ($9,600 / 100) x 100 = $9,600

Therefore, Real GDP for Vicuna for 2009 using 2011 as the base year equals $5,338.91, which is closest to choice C ($5,650).

Table 12-10 Consider the Data Shown Above for Vicuna,a Country