Consider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years.

$$\begin{matrix} & \text{2010} & \text{} & \text{2018}\\ \text{Good} & \text{Quantity} & \text{Price} & \text{Quantity} & \text{Price}\\ \text{Hot dogs} & \text{200} & \text{\$2} & \text{250} & \text{\$4}\\ \text{Hamburgers} & \text{200} & \text{\$3} & \text{500} & \text{\$4}\\ \end{matrix}$$

a. Using 2010 as the base year, compute the following statistics for each year: nominal GDP, real GDP, the implicit price deflator for GDP, and the CPI. b. By what percentage did prices rise between 2010 and 2018? Give the answer for each good and also for the two measures of the overall price level. Compute the answers given by the Laspeyres and Paasche price indexes. Explain the difference.

Abby consumes only apples. In year 1, red apples cost $1 each, green apples cost$2 each, and Abby buys 10 red apples. In year 2, red apples cost $2, green apples cost$1, and Abby buys 10 green apples. a. Compute the CPI for apples for each year. Assume that year 1 is the base year in which the consumer basket if fixed. How does your index change from year 1 to year 2? b. Compute Abby's nominal spending on apples in each year. How does it change from year 1 to year 2? c. Using year 1 as the base year, compute Abby's real spending on apples in each year. How does it change from year 1 to year 2? d. Defining the implicit price deflator as nominal spending dividend by real spending, compute the deflator for each year. How does the deflator change from year 1 to year 2? e. Suppose that Abby is equally happy eating red or green apples. How much the true cost of living increased for Abby? Compare this answer to your answer to part (a) and (d). What does this example tell you about Laspeyres and Paasche price indexes?

The population of Ectenia is 100 people: 40 work full-time, 20 work half-time but would prefer to work full-time, 10 are looking for a job, 10 would like to work but are so discouraged they have given up looking, 10 are not interested in working because they are full-time students, and 10 are retired. What is the number of unemployed? a. 10 b. 20 c. 30 d. 40