NUR AFIFAH BINTI MAZLAN KMB 1 1190631

MACROECONOMICS –MEA 2033

QUIZ 1

QUESTION 1

A nations' standard of living is best measured by its real GDP per person.

QUESTION 2

Real GDP – The production of goods and services valued at constant price.

i. Athens = ($10 of ribs × 200000) + ($4 of baked potatoes × 400 000)

=$3 600 000
Troy = ($10 of ribs × 300000) + ($4 of baked potatoes × 250 000)
= $4 000 000

Real GDP per person- national income per person.

Athens = $3 600 000 ÷ 6000

= $600
Troy = $4 000 000 ÷ 8000
= $500

ii. Real GDP uses constant base-year price to place a value on the economy's production
of goods and services. Real GDP per person is used to calculate income for each
person in the country. Athens has higher standard of living than Troy.