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 2012?
A) $21,000.
B) $21,700.
C) $24,000.
D) $24,800.
E) $25,000.

Question

Quizplus · Accepted Answer

To calculate Bob's contribution to real GDP in 2012 using 2011 as the base year, we use the 2011 price for the 2012 quantity: 3,100 haircuts * $7 = $21,700.

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