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In 2013, Adanac produced 20 kilos of apples and 35 kilos of bananas. Both fruits were used exclusively for final consumption and nothing else was
In 2013, Adanac produced
20
kilos of apples and
35
kilos of bananas. Both fruits were used exclusively for final consumption and nothing else was produced. In 2013, a kilo of apples sold for
$6
while a kilo of bananas sold for
$10
.
In 2014, Adanac produced only
15
kilos of apples but produced
45
kilos of bananas. In 2014, prices were
$7
per kilo of apples and
$8
per kilo of bananas. Using 2013 prices, economists estimate that potential GDP is
$500
in 2014. The output gap in 2014 is
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