1.7. The economy of Britannica produces three goods: computers, DVDs, and pizza. The accompanying table shows the prices and output of the three goods for the years 2005, 2006, and 2007.

a. What is the percent change in production of each of the goods from 2005 to 2006 and from 2006 to 2007?

b. What is the percent change in prices of each of the goods from 2005 to 2006 and from 2006 to 2007?

c. Calculate nominal GDP in Britannica for each of the three years. What is the percent change in nominal GDP from 2005 to 2006 and from 2006 to 2007?

d. Calculate real GDP in Britannica using 2005 prices for each of the three years. What is the percent change in real GDP from 2005 to 2006 and from 2006 to 2007?

Transcribed Image Text:

Year Computers Price Quantity DVDs Pizza Price Quantity Price Quantity 2005 $900 10 $10 100 $15 2 2006 1,000 10.5 12 105 16 2 2007 1,050 12 14 110 17 3