Consider a Small Country Producing Only Two Commodities (Coffee Beans

question 98

Multiple Choice

Consider a small country producing only two commodities (coffee beans and corn) . Following are the price and output of these two commodities in the year 2008: Assuming the price level in the economy remains same while the output of both these products increase by 10 percent in 2009, calculate the value of real GDP in this country for the year 2009?
Price
Quantity
$12
500 lbs. of coffee beans
$6
600 bushels of corn

• A) $9,600
• B) $10,560
• C) $1,056
• D) $6,900
• E) $10, 960

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Definitions:

Maximise

To increase to the greatest possible amount or degree.

Input

Resources or factors used in the production process to generate output, such as labor, capital, and materials.

Marginal Product

Marginal product refers to the additional output that is generated by employing one more unit of a particular input, holding the quantities of other inputs constant.

Fertilizer

Materials, either natural or synthetic, applied to soils or directly to plants, to supply nutrients essential for growth.