Suppose an Economy Produces Only Cranberries and Maple Syrup

question 46

Multiple Choice

Suppose an economy produces only cranberries and maple syrup.In 2010,50 units of cranberries are sold at $20 per unit and 100 units of maple syrup are sold at $8 per unit.In 2009,the base year,the price of cranberries was $10 per unit and the price of maple syrup was $15 per unit.For 2010,

• A)nominal GDP is $1800,real GDP is $2000,and the GDP deflator is 90.
• B)nominal GDP is $1800,real GDP is $2000,and the GDP deflator is 111.1.
• C)nominal GDP is $2000,real GDP is $1800,and the GDP deflator is 90.
• D)nominal GDP is $2000,real GDP is $1800,and the GDP deflator is 111.1.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service, often used to allocate labor costs to products or services.

Standard Rate of Pay

The fixed amount of money paid to employees for a specific job or activity, typically expressed on an hourly or annual basis.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, valued at the standard cost.

Per-unit Standards

Benchmark cost measures for the production of one unit of a product, covering all relevant costs of production.