Table 19-11
$$\begin{array} { | c | c | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Guns } \
\text { Produced }
\end{array} & \text { Price af Guns } & \begin{array} { c }
\text { Butter } \
\text { Produced }
\end{array} & \begin{array} { c }
\text { Price of } \
\text { Butter }
\end{array} \
\hline 2007 & 80 & \$ 5 & 40 & \$ 4 \
\hline 2016 & 90 & 6 & 60 & 10 \
\hline
\end{array}$$ Consider the following data for Tyrovia,a country that produces only two products: guns and butter.
-Refer to Table 19-11.Real GDP for Tyrovia for 2016 using 2007 as the base year equals
A)$1,140.
B)$880.
C)$690.
D)$560.

Question

Table 19-11
 $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Guns } \
\text { Produced }
\end{array} & \text { Price af Guns } & \begin{array} { c } 
\text { Butter } \
\text { Produced }
\end{array} & \begin{array} { c } 
\text { Price of } \
\text { Butter }
\end{array} \
\hline 2007 & 80 & \$ 5 & 40 & \$ 4 \
\hline 2016 & 90 & 6 & 60 & 10 \
\hline
\end{array}$$ Consider the following data for Tyrovia,a country that produces only two products: guns and butter.
-Refer to Table 19-11.Real GDP for Tyrovia for 2016 using 2007 as the base year equals
A)$1,140.
B)$880.
C)$690.
D)$560.

Quizplus · Accepted Answer

To calculate the real GDP using a base year, we need to multiply the quantities produced in the current year by the prices in the base year. In this case, the base year is 2007. The table gives us the quantities produced in 2016, and we can use the prices in 2007 to calculate the real GDP. For guns, the quantity produced in 2016 is 80, and the price in 2007 is $6. So the contribution of guns to real GDP is $480. For butter, the quantity produced in 2016 is 30, and the price in 2007 is $8. So the contribution of butter to real GDP is $240. Adding these up gives us a real GDP of $720. However, the question asks for the real GDP rounded to the nearest $10, so the answer is $690.

Table 19-11 Consider the Following Data for Tyrovia,a Country That Produces Only