Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $

Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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