Questions: Suppose that Glitter Gulch, a gold mining firm, increased its sales revenues on newly mined gold from 90 million to 180 million between one year and the next. Instructions: Enter your answers as a whole number. a. Assuming that the price of gold increased by 100 percent over the same period, by what numerical amount did Glitter Gulch's real output change? percent b. If the price of gold had not changed, what would have been the change in Glitter Gulch's real output? million

To solve the problem, we need to understand the relationship between sales revenue, price changes, and real output.

We are given that the price of gold increased by 100 percent. This means the price doubled. If the price doubled, then the increase in sales revenue from $90 million to $180 million could be entirely due to the price increase, with no change in the real output.

1. Initial Revenue: $90 million
2. Final Revenue: $180 million
3. Price Increase: 100% (price doubled)

Since the price doubled, the real output (quantity of gold sold) did not change. The entire increase in revenue is due to the price increase.

Answer for Part a: 0 percent

If the price of gold had not changed, the entire increase in sales revenue would be due to an increase in real output.

1. Initial Revenue: $90 million
2. Final Revenue: $180 million
3. Price Change: 0% (price did not change)

Since the price did not change, the increase in revenue from $90 million to $180 million is entirely due to an increase in the quantity of gold sold.

Change in Real Output: $180 million - $90 million = $90 million

Answer for Part b: $90 million

In summary:

• The real output change in percentage terms is 0 percent if the price doubled.
• The real output change in dollar terms is $90 million if the price did not change.