stuck on tricky econ problem- please help?

Question

The country of Springfield produces three goods: pizza, economics textbooks, and video games. The prices and output for the goods are shown for the years 2001 and 2002. The currency in Springfield is the dollar.
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Year 2001 Year 2002
Quantity Price Quantity Price
Pizza 150 $10 160 $9
Econ books 20 $100 15 $120
V. games 40 $50 45 $60
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Which of the following statements concerning Springfield is NOT true?
A. Real output was lower in 2002 than in 2001.
B. The production of goods was higher in 2002 than in 2001.
C. Nominal GDP was higher in 2002 than in 2001.
D. In this calc, both nominal and real gdp in 2001 are measured in 2001 dollars
I'd say D or A but its tricky

the data is not spread out enough but you can tell what is under what column by aligning from top down

Answer 1

It isn't tricky, you just need to open your textbook or go to class.

Without doing any calculations, B must be the answer because production is higher for some goods, but not others and comparing units doesn't make sense to determine the "size" or value of output. Consider an extreme example of an economy that produces 1,000 pens in 2001, and then produces 500 cars in 2002. Is it bigger/more valuable in 2001 or 2002?

The only way you can say output is larger in 2002 is if production of each good is >= production in 2001- with one or more strict inequalities.

If you want to do the calcs, which you REALLY need to do since you don't understand nominal vs. real:

To see that A is true, multiply both the 2001 quantities and 2002 quantities by the 2001 prices, Next, add up the 2001 amounts and the 2002 amounts separately. Finally, compare the two values.

To see that C is true, multiply the 2001 quantities by the 2001 prices and 2002 quantities by the 2002 prices. Next, add up the 2001 amounts and the 2002 amounts. Finally, compare the two sums.

D is true as long as 2001 is the base year. Using the earliest year as the base year is usually a reasonable assumption in econ.

Answer 2

D is false. for others
calculate what 2001 output would cost in 2002 prices to get CPI for real values
calculate what 2002 output would cost in 2001 prices to get GDP deflator and production value from nominal GDP

Answer 3

a) it would bring about greater money universal being spent on alcohol, as cost is now greater high priced however the certainly volume offered would fall. b) whether it incredibly is elastic this would recommend that any strengthen in cost would see a great replace in volume demanded. subsequently i'd have theory that alco pops have been inelastic, scholars would nonetheless purchase the item. however if we assume it incredibly is elastic i think you are able to desire to work out greater alcohol being fed on yet not in pre mixed beverages - may well be purchase substitutes with decrease tax, ie wine and spirits that are actually not pre mixed. lower back the question may additionally assume that scholars will spend greater money, as there is the form of huge tax being charged, and so would see entire volume being spent strengthen however the full volume offered falling.