An Economy Produces Only 1,000,000 Computers Valued at $2,000 Each

question 55

Multiple Choice

An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. The unsold computers at the end of the year are held in inventory by the computer manufacturers. What is the value of GDP?

• A) $0.9 billion
• B) $1.0 billion
• C) $1.8 billion
• D) $2.0 billion

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Definitions:

Buyers' Value

The maximum amount a buyer is willing to pay for a good or service.

Price Comparison

The process of analyzing and evaluating the prices of similar goods or services across different suppliers or stores.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, indicating the economic benefit to consumers.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, resulting in market balance.