Use the Following to Answer Questions: Table: Three-Good Economy I

question 133

Multiple Choice

Use the following to answer questions: Table: Three-Good Economy I $$\begin{array} { l c c c c } \hline \text { Product } & \text { Quantity (2008) } & \text { Price (2008) } & \text { Quantity (2009) } & \text { Price (2009) } \\\hline \text { Computers } & 25 & \$ 800.00 & 30 & \$ 1,000.00 \\\text { Pizzas } & 90 & 9.00 & 100 & 10.00 \\\text { Burgers } & 180 & 1.80 & 200 & 2.00 \\\hline\end{array}$$
-(Table: Three-Good Economy I) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the real GDP in 2008?

• A) $20,134
• B) $21,134
• C) $25,260
• D) $26,260

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Definitions:

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as the standard guidelines for financial accounting.

Purchasing Department

The division within an organization responsible for acquiring goods, services, and equipment necessary for its operations.

Weighted Average Cost Flow Assumption

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.