Use the following to answer questions:
-(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2013 was:
A) $400.
B) $420.
C) $425.
D) $445.

Question

Use the following to answer questions: 
-(Table: Lemonade and Cookies) Use Table: Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2014 is the base year, real GDP in 2013 was:
A) $400. 
B) $420. 
C) $425. 
D) $445.

Quizplus · Accepted Answer

Real GDP in 2013 is $425. This is calculated by multiplying the quantity of lemonade produced in 2013 (100 gallons) by the price of lemonade in 2014 ($4.25 per gallon) and adding the quantity of cookies produced in 2013 (100 dozen) by the price of cookies in 2014 ($2.50 per dozen).

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