1988 1989

Question

Quantity Price ($) Quantity Price ($)
Milk 10 1.00 15 1.20
Butter 8 0.50 20 0.50
Eggs 8 0.25 4 1.00
The table above gives the prices and quantities for a hypothetical country that only produces milk, butter, and eggs. With 1988 as the base year, what is the Real GDP in 1989?

(1 point)
Responses

$26
26 dollars

$16
16 dollars

$24
24 dollars

$32

Answer 1

To calculate the Real GDP in 1989 using 1988 as the base year, we need to multiply the quantities in 1989 by the prices in 1988.

For Milk: 15 (quantity in 1989) * 1.00 (price in 1988) = 15
For Butter: 20 (quantity in 1989) * 0.50 (price in 1988) = 10
For Eggs: 4 (quantity in 1989) * 0.25 (price in 1988) = 1

Adding these together: 15 + 10 + 1 = 26

Therefore, the Real GDP in 1989 is $26.

So, the correct answer is:

$26
26 dollars