Consider a simple economy that produces two goods: apples and oranges. The following table shows the prices and quantities of the goods over a three-year period.

Year

Apples

Oranges

Price

Quantity

Price

Quantity

(Dollars per apple)

(Number of apples)

(Dollars per orange)

(Number of oranges)

2012 2 125 3 155
2013 4 135 3 210
2014 2 125 3 165
Use the information from the preceding table to fill in the following table.

Year

Nominal GDP

Real GDP

GDP Deflator

(Dollars)

(Base year 2012, dollars)

2012
2013
2014
Points:

Close Explanation

Explanation:

From 2013 to 2014, nominal GDP selector 1

decreased

increased

, and real GDP selector 2

decreased

increased

.

Points:

Close Explanation

Explanation:

The inflation rate in 2014 was selector 1

-23.1%

-0.2%

23.1%

76.9%

130%

.

Points:

Close Explanation

Explanation:

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

Real GDP is not influenced by price changes, but nominal GDP is.

Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

Hanna intends to give her granddaughter, melodee, her antique hat pin. this heirloom has been kept under lock and key in the wall vault in the library of hanna's house in virginia. the hat pin is currently the only item in the vault. when hanna is visiting melodee in connecticut, hanna gives melodee the only key to the vault. melodee is grateful for the present and excitedly accepts. in this situation has there been a completed gift?

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?