Table 12-2
$\begin{array}{|c|c|r|}
\hline \text { Product } & \text { Quantity } & \text { Price } \
\hline \text { Shoes } & 40 & \$ 60.00 \
\hline \text { DVDs } & 100 & 18.00 \
\hline \text { Tomatoes } & 2,000 & 1.00 \
\hline \text { Ketchup } & 300 & 4.00 \
\hline
\end{array}$
-Refer to Table 12-2.Suppose that a simple economy produces only four goods and services: shoes,DVDs,tomatoes,and ketchup.Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.Using the information in the above table,nominal GDP for this simple economy equals

Question

Table 12-2
 $\begin{array}{|c|c|r|}
\hline \text { Product } & \text { Quantity } & \text { Price } \
\hline \text { Shoes } & 40 & \$ 60.00 \
\hline \text { DVDs } & 100 & 18.00 \
\hline \text { Tomatoes } & 2,000 & 1.00 \
\hline \text { Ketchup } & 300 & 4.00 \
\hline
\end{array}$
-Refer to Table 12-2.Suppose that a simple economy produces only four goods and services: shoes,DVDs,tomatoes,and ketchup.Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.Using the information in the above table,nominal GDP for this simple economy equals

Quizplus · Accepted Answer

To calculate nominal GDP, we multiply the quantity of each good or service produced by its price and sum the values.

For shoes, the nominal GDP contribution is $60.00 x 40 = $2,400. 
For DVDs, the nominal GDP contribution is $18.00 x 100 = $1,800. 
For ketchup, the nominal GDP contribution is $4.00 x 300 = $1,200. 
For tomatoes, half are used in making ketchup, so the contribution is 0.5 x $1.00 x 2000 = $1,000. The other half are purchased by households, so the contribution is 0.5 x $1.00 x 2000 = $1,000.

Total nominal GDP for the simple economy is $2,400 + $1,800 + $1,200 + $1,000 + $1,000 = $6,400. Therefore, the answer is B, $6,400.

Table 12-2 -Refer to Table 12-2