The Base Year Is 2019

question 62

Multiple Choice

The base year is 2019. A country only produces iPhones. The price of an iPhone in 2017 was $50. The price of an iPhone was $30 in 2019. The quantity of iPhones produced in 2017 was 10,000 units and in 2019 was 20,000 units. Nominal GDP in 2019 equals

• A) $1,000,000.
• B) $600,000.
• C) $500,000.
• D) $200,000.
• E) an amount that cannot be determined without information about real GDP in 2014.

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Definitions:

Output Q₁

A specific quantity of goods or services produced by a firm or economy at a given time, indicated as "Q₁" to denote a particular level of output.

Output Q₃

Refers to a specific quantity of output, often used in economic models to represent production levels at a particular point.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation and output increases.

Diseconomies of Scale

The phenomenon when a firm experiences increased costs per unit of output due to inefficiencies associated with scale of production, contrary to economies of scale.