Measuring GDP - Income approach Assume an economy with a coal producer and a steel producer. In a given year, the coal producer produces 15 million tons of coal, selling for $5 a ton, and pays $50 million in wages. The steel producer uses 25 million tons of coal (10 of which are imported) as input to steel production, paying $5 per ton. The steel producer produces 10 million tons of steel, selling at $20 a ton. The steel producer pays $40 million in wages. All profits made by the coal and steel firm are distributed to domestic consumers. Considering both producers, what is the total amount of wages paid in this economy? Answer in millions.

Measuring GDP - Income approach Assume an economy with a coal producer and a steel producer. In a given year, the coal producer produces 15 million tons of coal, selling for $5 a ton, and pays $50 million in wages. The steel producer uses 25 million tons of coal (10 of which are imported) as input to steel production, paying $5 per ton. The steel producer produces 10 million tons of steel, selling at $20 a ton. The steel producer pays $40 million in wages. All profits made by the coal and steel firm are distributed to domestic consumers. Considering both producers, what is the total amount of wages paid in this economy? Answer in millions.

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

Measuring GDP - Income approach
Assume an economy with a coal producer and a steel producer. In a given year, the coal producer produces 15 million
tons of coal, selling for $5 a ton, and pays $50 million in wages. The steel producer uses 25 million tons of coal (10 of
which are imported) as input to steel production, paying $5 per ton. The steel producer produces 10 million tons of steel,
selling at $20 a ton. The steel producer pays $40 million in wages. All profits made by the coal and steel firm are
distributed to domestic consumers.
Considering both producers, what is the total amount of wages paid in this economy? Answer in millions.

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