Question

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The table shows the quantities produced and prices in 2015 and 2016 for an economy which produces only food and fun.
The base year is 2016.
Calculate the value of 2015 production in 2016 prices and the percentage change in production when valued at 2016 prices.

The value of 2015 production in 2016 prices is $_____.
The percentage change in production when valued at 2016 prices is ____ percent.
≫ Answer to 1 decimal place.
≫ If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign.

in 2015
item Quantity Price
Food 98 $3
Fun 52 $6

in 2016
item Quantity Price
Food 71 $6
Fun 65 $9

Answer 1

To calculate the value of 2015 production in 2016 prices, we need to multiply the quantity of each item produced in 2015 by the corresponding price in 2016, and then sum up the values.

Value of 2015 Food production in 2016 prices = 98 (quantity) * $6 (price in 2016) = $588

Value of 2015 Fun production in 2016 prices = 52 (quantity) * $9 (price in 2016) = $468

Total value of 2015 production in 2016 prices = $588 + $468 = $1056

The value of 2015 production in 2016 prices is $1056.

To calculate the percentage change in production when valued at 2016 prices, we need to compare the total value of 2015 production in 2016 prices with the total value of 2016 production.

Value of 2016 Food production = 71 (quantity) * $6 (price in 2016) = $426

Value of 2016 Fun production = 65 (quantity) * $9 (price in 2016) = $585

Total value of 2016 production = $426 + $585 = $1011

Percentage change in production when valued at 2016 prices = ((Total value of 2015 production in 2016 prices - Total value of 2016 production) / Total value of 2016 production) * 100

= (($1056 - $1011) / $1011) * 100

= ($45 / $1011) * 100

= 4.45%

The percentage change in production when valued at 2016 prices is 4.45%.