Solve the case study.

If there are only two goods produced in an economy in 2010 and 2011 years. In 2010, Tin tuna cost $10, with a quantity of 100 and an amount of 50 employees, and health caring cost $10, with a quantity of 200 and an amount of also 50 employees. In 2011, Tin tuna cost $12, with a quantity of 100 and an amount of 50 employees, and health caring cost $12, with a quantity of 230 and an increased amount of 60 employees.

a. What is nominal GDP in each year? b. Using year 2010 prices, what is real GDP in year 2011? What is the growth rate of real GDP? c. What is the rate of inflation using the GDP deflator? d. Using year 2010 prices, what is real GDP per worker in year 2010 and year 2011? What is labor productivity growth between year 2010 and year 2011 for the whole economy?

If product services of health care in year 2011 was not the same as the health care services in year 2010 because they include a new health care service, which year 1 health services didn't include. Thou the new health care treatment was available in year 1 but the price of the health care with the new health care treatment in year 1 was $13 and no one chose that treatment package. However, in year 2011 the price of health care treatment was $12 and everyone chose to have that package in year 2011 (that is, in year 2011 no one chose to have the year 2010 health care treatment package).

e. Using year 2010 prices, what is real GDP for year 2011? What is the growth rate of real GDP? f. What is the rate of inflation using the GDP deflator? g. What is the labor productivity growth between year 2010 and year 2011 for the whole economy?

h. 'If health care treatment were not measured probably, for example; by not taking into account the introduction of the new health care. we will overestimate inflation and underestimate productivity growth.' Discuss in the light of the answers to parts (a) to (g).