Bob's Barber Shop gave 3,000 haircuts in the year 2011 and 3,100 in the year 2012.The price of a haircut was $7 in 2011 and $8 in 2012.If the year 2011 is the base year,what was Bob's contribution to real GDP in the year 2011?
A) $21,000.
B) $21,700.
C) $24,000.
D) $24,800.
E) $25,000.

Question

Quizplus · Accepted Answer

To calculate real GDP, we need to use the prices from the base year (in this case, 2011). Bob's contribution to real GDP in 2011 would be calculated as:

Real GDP 2011 = (Haircuts in 2011 x Price in 2011) + (Haircuts in 2012 x Price in 2011)

Real GDP 2011 = (3,000 x $7) + (3,100 x $7)

Real GDP 2011 = $21,000

Therefore, the answer is A) $21,000.

Bob's Barber Shop Gave 3,000 Haircuts in the Year 2011