Consider about a market with two businesses. Iron is produced by Firm 1 utilizing both labor-intensive machinery and human labor. It does so by selling the iron to Firm 2, which makes roofing sheets, for K1500. Firm 1 pays its employees K1000, leaving it with K500 in profit. Firm 2 purchases the iron and uses it to make roofing sheets along with staff members and equipment. Sales of automobiles bring in K3000. Out of the K3000, K1500 is used to pay for iron, K750 is distributed to company employees, and K750 is left over as profit. Required 1. What is the final cost of the produced goods? 2. How much value was added overall? How much money was made overall? 3. Identify and discuss three issues with calculating national income.

Consider about a market with two businesses. Iron is produced by Firm 1 utilizing both labor-intensive machinery and human labor. It does so by selling the iron to Firm 2, which makes roofing sheets, for K1500. Firm 1 pays its employees K1000, leaving it with K500 in profit. Firm 2 purchases the iron and uses it to make roofing sheets along with staff members and equipment. Sales of automobiles bring in K3000. Out of the K3000, K1500 is used to pay for iron, K750 is distributed to company employees, and K750 is left over as profit. Required 1. What is the final cost of the produced goods? 2. How much value was added overall? How much money was made overall? 3. Identify and discuss three issues with calculating national income.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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