Use the following information to answer the next several questions:
Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2016, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively.
-Based on the information in Scenario 1, real GDP in 2016 (in 2015 dollars) in this economy was

Question

Quizplus · Accepted Answer

To calculate real GDP in 2016 (in 2015 dollars), we need to use the prices from 2015. We can use the formula: 
Real GDP = (quantity in 2016 x price in 2015) + (quantity in 2016 x price in 2015) 
Real GDP = (85 x $5) + (50 x $12) 
Real GDP = $425 + $600 
Real GDP = $1,025.

Use the Following Information to Answer the Next Several Questions