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)market value;30 units
B)a market basket;30 units
C)market value;$120
D)real value;$120
E)a price index;$120

Question

Quizplus · Accepted Answer

GDP is calculated by multiplying the market value of each good or service by its quantity produced. In this case, Wobet produces 10 steaks with a market value of $10 each, which equals $100, and 20 potatoes with a market value of $1 each, which equals $20. Adding these together, Wobet's GDP is equal to $120. Therefore, choice C is correct.

Wobet Is a Small Country That Produces Only Steak and Potatoes.Steaks