Exhibit 18-1 -In a Simple Economy, Wanda's Weavers Grows Cotton and Weaves

Multiple Choice

Exhibit 18-1

-In a simple economy, Wanda's Weavers grows cotton and weaves it into cloth. In the current year, Wanda's Weavers produces cloth valued at $1,000, half of which it sells directly to consumers for their own personal use and half of which it sells to Joe's T-shirts. Joe's T-shirts produces T-shirts valued at $1,500 for the current year. What is the value of GDP in this simple economy?

A) $2,500
B) $1,500
C) $500
D) $1,000
E) $2,000