Econ 362 Hanes First Midterm Online Assessment

Just two final goods and services are produced in the country of Etruria: haircuts and hats.
The following table shows prices and quantities from 2012 through 2014.
Haircuts Hats
Price Quantity Price Quantity
2012 6 135 54 9
2013 8 163 57 3
2014 9 149 53 7
a) What is nominal GDP in each year? Write your answers in the following table.
Nominal GDP
2012
2013
2014
b) Construct a real GDP quantity index for each year, base year 2012, base year value equal to 100.
Now, in class I didn’t tell you everything you need to know to do this.
When I got to outline section II) B) 5) c),
I said that the way you average the two numbers from steps ii) and iii) is a special,
complicated sort of average. For this problem, just take the simple, ordinary average of the numbers
from ii) and iii) to do step iv).
Real GDP Quantity Index (base year 2012 = 100)
2012
2013
2014
c) Construct a Chained (2012) dollar real GDP index.
Again, for outline section II) B) 5) c),
I said that the way you average the two numbers from steps ii) and iii) is a special,
complicated sort of average. For this problem, just take the simple, ordinary average of the numbers
from ii) and iii) to do step iv). xc
Chained (2012) real GDP index
2012
2013
2014
d) Construct a Laspeyres price index , like the Consumer Price Index, base year 2012,
base year value equal to 1
Index number
2012
2013
2014

DETAILED ASSIGNMENT

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