Table 12-1
$\begin{array}{|l|c|c|}
\hline {\text { Product }} & \text { Quantity } & \text { Price } \
\hline \text { Sweatshirts } & 50 & \$ 35.00 \
\hline \text { Dental examinations } & 40 & 75.00 \
\hline \text { Coffee drinks } & 1,000 & 4.00 \
\hline \text { Coffee beans } & 2,000 & 0.50 \
\hline
\end{array}$
-Refer to Table 12-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals

Question

Table 12-1
 $\begin{array}{|l|c|c|}
\hline {\text { Product }} & \text { Quantity } & \text { Price } \
\hline \text { Sweatshirts } & 50 & \$ 35.00 \
\hline \text { Dental examinations } & 40 & 75.00 \
\hline \text { Coffee drinks } & 1,000 & 4.00 \
\hline \text { Coffee beans } & 2,000 & 0.50 \
\hline
\end{array}$
-Refer to Table 12-1.Suppose that a simple economy produces only four goods and services: sweatshirts,dental examinations,coffee drinks,and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table,nominal GDP for this simple economy equals

Quizplus · Accepted Answer

Nominal GDP is calculated as the sum of the prices times the quantities of all goods and services produced.

Nominal GDP = (Quantity of sweatshirts x Price of sweatshirts) + (Quantity of dental examinations x Price of dental examinations) + (Quantity of coffee drinks x Price of coffee drinks) + (Quantity of coffee beans x Price of coffee beans)

Substituting the given values:

Nominal GDP = (50 x $35.00) + (40 x $75.00) + (1,000 x $4.00) + (2,000 x $0.50)

= $1,750 + $3,000 + $4,000 + $1,000

= $8,750

Therefore, the answer is (C) $8,750.

Table 12-1 -Refer to Table 12-1