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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Question

Title
Microsoft Word - Rec02_nosoldocx Exercise 1: There
are two firms in the economy of Venus Firm A prod
Description
Microsoft Word - Rec02_nosoldocx
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
s GDP using the income
c) Compute Venusâ
approach
s GDP using the value added

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