For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by
this table: $$\begin{array} { | l | l | l | }
\hline & \text { Pens } & \text { Pencils } \
\hline \text { Year 1 quantity } & 15 & 10 \
\hline \text { Year 1 price } & \$ 12 & \$ 12 \
\hline \text { Year 2 quantity } & 17 & 12 \
\hline \text { Year 2 price } & \$ 14 & \$ 15 \
\hline
\end{array}$$
-What is the real GDP in year 1 using base year 1?
A)$418
B)$338
C)$300
D)$294
E)$360

Question

For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by
this table: $$\begin{array} { | l | l | l | } 
\hline & \text { Pens } & \text { Pencils } \
\hline \text { Year 1 quantity } & 15 & 10 \
\hline \text { Year 1 price } & \$ 12 & \$ 12 \
\hline \text { Year 2 quantity } & 17 & 12 \
\hline \text { Year 2 price } & \$ 14 & \$ 15 \
\hline
\end{array}$$
-What is the real GDP in year 1 using base year 1?
A)$418
B)$338
C)$300
D)$294
E)$360

Quizplus · Accepted Answer

Real GDP in year 1 using base year 1 prices is calculated by multiplying the quantities of goods produced in year 1 by their year 1 prices. For pens: 15 * $12 = $180. For pencils: 10 * $12 = $120. Adding these together gives $300.

For the Following Question(s), Suppose an Economy Produces Only Pens