Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using ________, Wobet has GDP equal to ________.
A) a price index; $120
B) market value; $120
C) market value; 30 units
D) real value; $120
E) a market basket; 30 units

Question

Quizplus · Accepted Answer

GDP can be calculated using market value, which is the price of goods times the quantity produced. In this case, (10 steaks * $10) + (20 potatoes * $1) = $100 + $20 = $120.

Wobet Is a Small Country That Produces Only Steak and Potatoes