Problem 1 The table below contains data about a hypothetical economy comprised of three firms. Value of sales Intermediate goods Wages Interest payments Rent Profit Total expenditure by firm Value added by firm Ore Firm 4200 (ore) 0 2000 1000 200 1000 4200 Steel Firm 9000 (steel) 4200 (iron ore) 3700 600 300 200 9000 • Calculate the value added by firm; . Calculate the total factor income; • Calculate the GDP of the economy: 1) Using the national spending approach; 2) Factor income approach; 3) Value added approach. Car Firm 21500 (car) 9000 (steel) 10000 1000 500 1000 21500 Total factor income ? ? ? ?

Problem 1 The table below contains data about a hypothetical economy comprised of three firms. Value of sales Intermediate goods Wages Interest payments Rent Profit Total expenditure by firm Value added by firm Ore Firm 4200 (ore) 0 2000 1000 200 1000 4200 Steel Firm 9000 (steel) 4200 (iron ore) 3700 600 300 200 9000 • Calculate the value added by firm; . Calculate the total factor income; • Calculate the GDP of the economy: 1) Using the national spending approach; 2) Factor income approach; 3) Value added approach. Car Firm 21500 (car) 9000 (steel) 10000 1000 500 1000 21500 Total factor income ? ? ? ?

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

Problem 1
The table below contains data about a hypothetical economy comprised of three
firms.
Value of sales
Intermediate
goods
Wages
Interest
payments
Rent
Profit
Total
expenditure
by firm
Value added
by firm
Ore Firm
●
4200
(ore)
0
2000
1000
200
1000
4200
Steel Firm
9000
(steel)
4200
(iron ore)
3700
600
300
200
9000
• Calculate the value added by firm;
●
Calculate the total factor income;
?
Calculate the GDP of the economy:
1) Using the national spending approach;
2) Factor income approach;
3) Value added approach.
Car Firm
21500
(car)
9000
(steel)
10000
1000
500
1000
21500
?
Total factor
income
?
?
?
?

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