Assume an economy with a coal producer, a steel producer, and some consumers. (There is no government.) In a given year, the coal producer produces 15 million tonnes of coal and sells it for $5 per tonne. The coal producer pays $60 million in wages to consumers. The steel producer uses 40 million tonnes of coal as an input into steel production, all purchased at $5 per tonne. Of this, 15 million tonnes of coal comes from the domestic coal producer, and 25 million tonnes is imported. The steel producer produces 19 million tonnes of steel and sells it for $15 per tonne. Domestic consumers buy 11 million tonnes of steel, and 8 million tonnes are exported The steel producer pays consumers $70 million in wages. All profits made by domestic producers are distributed to domestic consumers. a. Determine GDP using (i) the product approach, (i) the expenditure approach, and (iii) the income approach. () Using the product approach, the value added by the coal producer is $million, the value added by the steel producer is $million, and GDP in this economy is million.

Assume an economy with a coal producer, a steel producer, and some consumers. (There is no government.) In a given year, the coal producer produces 15 million tonnes of coal and sells it for $5 per tonne. The coal producer pays $60 million in wages to consumers. The steel producer uses 40 million tonnes of coal as an input into steel production, all purchased at $5 per tonne. Of this, 15 million tonnes of coal comes from the domestic coal producer, and 25 million tonnes is imported. The steel producer produces 19 million tonnes of steel and sells it for $15 per tonne. Domestic consumers buy 11 million tonnes of steel, and 8 million tonnes are exported The steel producer pays consumers $70 million in wages. All profits made by domestic producers are distributed to domestic consumers. a. Determine GDP using (i) the product approach, (i) the expenditure approach, and (iii) the income approach. () Using the product approach, the value added by the coal producer is $million, the value added by the steel producer is $million, and GDP in this economy is million.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter20: Unemployment

Section: Chapter Questions

Problem 10PA

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