Exercise 1: There are two firms in the economy of Venus Firm A produces wheat and Firm B produces bread Firm A sells 10 units of wheat to Firm B at a price of $70/unit It employs 10 workers at a price of $10 per worker and pays $50 in rents to domestic landowners It buys a tractor from Mars at the price of $300 for future production Firm B imports 5 units of sugar from Mars at a price of $5/unit and buys 10 unit of wheat from Firm A at a price of $70/unit It pays $200 in interest payments and employs 5 workers at a price of $10/worker It sells 10 units of bread at a price of $100/unit to domestic consumers and 2 unit of bread at a price of $200/unit to Martian consumers The consumers on Venus also purchase 5 units of fish from Mars at a price of $10/unit a) Compute Venusâ s GDP using the a) expenditure approach. b) Compute Venusâ approach c) Compute Venusâ approach s GDP using the income s GDP using the value added

Exercise 1: There are two firms in the economy of Venus Firm A produces wheat and Firm B produces bread Firm A sells 10 units of wheat to Firm B at a price of $70/unit It employs 10 workers at a price of $10 per worker and pays $50 in rents to domestic landowners It buys a tractor from Mars at the price of $300 for future production Firm B imports 5 units of sugar from Mars at a price of $5/unit and buys 10 unit of wheat from Firm A at a price of $70/unit It pays $200 in interest payments and employs 5 workers at a price of $10/worker It sells 10 units of bread at a price of $100/unit to domestic consumers and 2 unit of bread at a price of $200/unit to Martian consumers The consumers on Venus also purchase 5 units of fish from Mars at a price of $10/unit a) Compute Venusâ s GDP using the a) expenditure approach. b) Compute Venusâ approach c) Compute Venusâ approach s GDP using the income s GDP using the value added

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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