Question

suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton
further, assume that all of the cotton is used to produce shirts.
use the information in the following table to calculate nominal gross domestic product (nominal gdp) for 2025.
production and price statistics for 2025
shoes: quantity 125, price $65.00
hamburgers: quantity 110, price 3.00
shirts: quantity 60, price 30.00
cotton: quantity 2,200, price 0.75
the nominal gdp for the year 2025 is $\square$

Explanation:

Step1: Calculate the value of shoes

The value of shoes is calculated by multiplying the quantity of shoes by the price of shoes.
$125\times65 = 8125$

Step2: Calculate the value of hamburgers

The value of hamburgers is calculated by multiplying the quantity of hamburgers by the price of hamburgers.
$110\times3=330$

Step3: Calculate the value of shirts

The value of shirts is calculated by multiplying the quantity of shirts by the price of shirts.
$60\times30 = 1800$

Step4: Calculate the value of cotton

Since cotton is an intermediate good (used to produce shirts), it is not included in GDP.

Step5: Sum up the values of final goods

Sum the values of shoes, hamburgers and shirts.
$8125+330 + 1800=10255$

Answer:

$10255$