Year Good Price Quantity2020 Beer $4.00 2,000 Pretzels $3.00 ??2021 Beer $4.50 2,500 Pretzels ?? 6,000Year Nominal GDP Real GDP GDP Deflator (2020=1)2020 $23,000.00 $23,000.00 1002021 ?? $28,000.00 1.2059What is the price of pretzels in 2021?
Question
Year Good Price Quantity2020 Beer 3.00 ??2021 Beer 23,000.00 28,000.00 1.2059What is the price of pretzels in 2021?
Solution 1
To find the price of pretzels in 2021, we first need to calculate the nominal GDP for 2021.
We know that the Real GDP for 2021 is $28,000.00 and the GDP deflator for 2021 is 1.2059.
The formula to calculate Nominal GDP is:
Nominal GDP = Real GDP * GDP Deflator
So,
Nominal GDP for 2021 = 33,765.20
Now, we know that the Nominal GDP is the sum of the total value of all goods. In 2021, we have 2 goods - Beer and Pretzels.
We know the price and quantity of Beer sold in 2021, so we can calculate the total value of Beer sold.
Total value of Beer sold = Price of Beer * Quantity of Beer sold = 11,250.00
Now, to find the total value of Pretzels sold, we subtract the total value of Beer sold from the Nominal GDP.
Total value of Pretzels sold = Nominal GDP - Total value of Beer sold = 11,250.00 = $22,515.20
Finally, to find the price of Pretzels, we divide the total value of Pretzels sold by the quantity of Pretzels sold.
Price of Pretzels = Total value of Pretzels sold / Quantity of Pretzels sold = 3.75
So, the price of Pretzels in 2021 is $3.75.
Solution 2
To find the price of pretzels in 2021, we first need to calculate the nominal GDP for 2021.
We know that the Real GDP for 2021 is $28,000.00 and the GDP deflator for 2021 is 1.2059.
The formula to calculate Nominal GDP is:
Nominal GDP = Real GDP * GDP Deflator
So,
Nominal GDP for 2021 = 33,765.20
Now, we know that the Nominal GDP is the sum of the total value of all goods. In 2021, we have 2 goods - Beer and Pretzels.
We know the price and quantity of Beer sold in 2021, so we can calculate the total value of Beer sold.
Total value of Beer sold = Price of Beer * Quantity of Beer sold = 11,250.00
Now, to find the total value of Pretzels sold, we subtract the total value of Beer sold from the Nominal GDP.
Total value of Pretzels sold = Nominal GDP - Total value of Beer sold = 11,250.00 = $22,515.20
Finally, to find the price of Pretzels, we divide the total value of Pretzels sold by the quantity of Pretzels sold.
Price of Pretzels = Total value of Pretzels sold / Quantity of Pretzels sold = 3.75
So, the price of Pretzels in 2021 is $3.75.
Similar Questions
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