Use the Following to Answer Questions

question 300

Multiple Choice

Use the following to answer questions:
Scenario: Real GDP
Suppose that in year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.
-(Scenario: Real GDP) Look at the scenario Real GDP. Using year 1 as the base year, real GDP in year 2 is:

• A)$900.
• B)$970.
• C)$1,000.
• D)$1,077.50.

---

Definitions:

Milan

A city in Italy, known for its significant influence in fashion, design, and finance sectors.

Freight-Absorption Pricing

A pricing strategy where the seller absorbs all or part of the freight charges to make their product more attractive to distant buyers.

FOB Absorption Pricing

A pricing strategy where the seller absorbs all or part of the freight charges to deliver goods, making the price including transportation costs.

Basing-Point Pricing

Selecting one or more geographical locations (basing point) from which the list price for products plus freight expenses are charged to the buyer.