The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production and average prices of shoes and computers are displayed in Table 2 attached. (a)Explain why nominal GDP in 2020 differs from real GDP in 2020  (b) Calculate the changes in prices for both products. How much has price changed from 2019 to 2020?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production
and average prices of shoes and computers are displayed in Table 2 attached.

(a)Explain why nominal GDP in 2020 differs from real GDP in 2020 
(b) Calculate the changes in prices for both products. How much has price changed from 2019 to
2020?

Products Average
Price in
2019
Shoes 110
Computers 99
Average
Price in
2020
121
148
Total
production
in 2019
(units)
3500
2000
Total
production
in 2020
(units)
3700
3000
Transcribed Image Text:Products Average Price in 2019 Shoes 110 Computers 99 Average Price in 2020 121 148 Total production in 2019 (units) 3500 2000 Total production in 2020 (units) 3700 3000
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Medical Malpractice
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education