Suppose There Are Only Two Firms in an Economy: Rolling

question 82

Multiple Choice

Suppose there are only two firms in an economy: Rolling Rawhide produces rawhide and sells it to Chewy Chomp,Inc. ,which uses the rawhide to produce and sell dog chews.With each $1 worth of rawhide that it buys from Rolling Rawhide,Chewy Chomp,Inc.produces a dog chew and sells it for $2.50.Neither firm had any inventory at the beginning of 2014.During that year,Rolling Rawhide produced enough rawhide for 2000 dog chews.Chewy Chomp,Inc.bought 90% of that rawhide for $1800 and promised to buy the remaining 10% for $200 in 2015.Chewy Chomp,Inc.produced 1800 dog chews during 2014 and sold each one during that year for $2.50.What was the economy's GDP for 2014?

• A)$3,800
• B)$4,500
• C)$4,700
• D)$5,000

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Definitions:

Common Law

A legal system based on customs, judicial decisions, and precedent rather than written laws; prevalent in the UK and former British colonies.

Statutory Law

Law enacted by a legislative body, such as statutes passed by Congress or a state legislature.

Legislative Statute

A law enacted by a legislative body, setting forth general principles and provisions regarding specific matters.

Wright Line

A legal test used in labor law to determine if an employer's action against an employee was motivated by anti-union sentiment.