Question

In: Economics

Suppose that there are only two small countries in the​ world: Ascot, with a population of...

Suppose that there are only two small countries in the​ world: Ascot, with a population of 29,400 ​people, and​ Delwich, with a population of 21,000 people.​ Ascot's GDP is equal to ​$150 million while​ Delwich's GDP is ​$210 million.​ Delwich's GNP has been estimated to be equal to ​$240 million. The revenue earned by firms that operate in Delwich but are headquartered in Ascot is equal to ​$60 million.

Given the data​ above, Ascot's GNP is ​$___ million. ​(Enter your response as an integer​.)

In​ Ascot, the per capita GDP is ​$___. ​(Enter your response rounded to the nearest dollar​.)

In​ Delwich, the per capita GNP is ​$___. ​(Enter your response rounded to the nearest dollar​.)

Solutions

Expert Solution

GDP is Gross Domestic Product and it is the value of all goods and services produced within the domestic boundary of a country within a particular year. GNP, on the other hand, is Gross National Product and is the value of all goods and services produced by the residents of a country within a particular year. Now, the goods and services produced by the residents of a country can either be in the same country or in a different country also.

Gross National Product is calculated by:

Gross National Product (GNP) = Gross Domestic Product (GDP) + Net Factor Income from Abroad.

Now, given the data above, Ascot's GNP is = Ascot's GDP + Net Factor Income from Abroad

= ​$150 million + $60 million

= $210 million.

In​ Ascot, the per capita GDP is = Ascot's GDP/Total Population of Ascot

= $ 150M/29,400

= $ 150000000 / 29400

= $ 5,102 (rounded to the nearest dollar)

In​ Delwich, the per capita GNP is = Delwich's GNP/Total Population of Delwich

= $ 240M/ 21,000

= $ 240000000 / 21000

= $ 11,429 (rounded to the nearest dollar)

Rahul Sunny answered 2 years ago
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