Consider a small country producing only two commodities (coffee beans and corn). Following are the price and output of these two commodities in the year 2008: Price Quantity $12 500 lbs. of coffee beans $6 600 bushels of corn Assuming the price level in the economy remains same while the output of both these products increase by 10 percent in 2009, calculate the value of real GDP in this country for the year 2009

$10,560

Explanation:

Data is missing in the question, so a similar question is attached with this answer and answer is made accordingly.

According to given data

2008

Coffee beans

Quantity = 500 lbs

Price = $12 per lbs

Corn

Quantity = 600 bushels

Price = $6 per bushel

2009

As there is only change in quantity by 10% increase in Price of each product

New Quantities

Coffee beans = Quantity in 2008 x 110% = 500 lbs x 110% = 550 lbs

Corn = Quantity in 2008 x 110% =  600 bushels x 110% = 660 bushels

GDP is the market value of all the final goods and services produces and rendered during the period. here we only have two products, so the GDP will be calculated by taking total value of both.

GDP 2009 = (Quantity of Coffee beans in 2009 x Price of Coffee beans in 2009) + (Quantity of Corn in 2009 x Price of Corn in 2009)

GDP 2009 = (550 lbs x $12) + (660 bushels x $6) = $6,600 + $3,960 = $10,560

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