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1. An economy produces two goods: tomatoes and ketchup. It is assumed that half of the tomatoes are bought and consumed as final good, the other half is used to produce ketchup. In 2015, 30 pounds of tomatoes are produced at $2 each, and 20 ounces of ketchup at $7 each. In 2016, 40 pounds of tomatoes are produced at $4 each, and 30 ounces of ketchup at $8 each. Find the following:
a. Nominal GDP for 2015 and 2016
b. Real GDP for 2015 and 2016 (base year = 2015)
c. In?ation rate between 2015 and 2016
q. in class we discussed the idea that small farmers are sometimes price takers i.e. the price of wheat are set in the
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