Table 8-2 -Refer to Table 8-2.Suppose That a Simple Economy Produces Only

question 31

Multiple Choice

Table 8-2

-Refer to Table 8-2.Suppose that a simple economy produces only four goods and services: shoes,DVDs,tomatoes,and ketchup.Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households.Using the information in the above table,nominal GDP for this simple economy equals

• A)$7,400.
• B)$6,400.
• C)$5,800.
• D)2,440 units.

---

Definitions:

Total Revenue

The total amount of money a company receives from its business activities, such as sales of goods and services, before any expenses are subtracted.

Inelastic Demand

Refers to a situation where the quantity demanded of a good or service changes minimally in response to price changes.

Total Revenue

The total income received by a firm from selling its goods or services, calculated as the unit price multiplied by the quantity sold.

Law of Demand

A principle that states there is an inverse relationship between the price of a good and the quantity of it buyers are willing to purchase. As the price of a good increases, consumers will wish to purchase less of it. As the price decreases, consumers will wish to purchase more of it.