Question

The annual output and prices of a 3-good economy are shown in the table below. instructions: enter your answers as whole numbers.

a. what was gdp in year 1? $ .
b. what was gdp in year 2? $

Answer 1

In getting the GDP or Gross Domestic Product for year 1 and year 2, you should multiply the price to the quantity of goods sold and add them all up.

For GDP Year 1

Given:

Quarts of Ice Cream with a price of $6 and 4 quantity of goods.

Bottle of Shampoo with a price of $5 and 2 quantity of goods.

Jars of Peanut butter with a price of $3 and 4 quantity of goods.

= (6 x 4) + (5 x 2) + (3 x 4)

= $46

For GDP Year 2, the same products with different price and quantity.

= (6 x 6) + (5 x 3) + (3 x 3)

= $60