Q2. Assume that a Kia automobiles dealership in Mehrauli, Gurugram transshipped 300 Kia Sonet cars from South Korea at a cost of Rs. 13 lakhs per car in September 2019. By March 31, 2020, they were able to sell 200 of these Sonet cars at a price of Rs. 16 lakhs each. The remaining Hyundai cars were sold in April 2020 at a price Rs. 14 lakhs each. How exactly will this affect the GDP in 2019-20 and 2020-21, and which components of GDP will be affected? Explain your answer through the expenditure as well as the value-added method of computing national income.

Q2. Assume that a Kia automobiles dealership in Mehrauli, Gurugram transshipped 300 Kia Sonet cars from South Korea at a cost of Rs. 13 lakhs per car in September 2019. By March 31, 2020, they were able to sell 200 of these Sonet cars at a price of Rs. 16 lakhs each. The remaining Hyundai cars were sold in April 2020 at a price Rs. 14 lakhs each. How exactly will this affect the GDP in 2019-20 and 2020-21, and which components of GDP will be affected? Explain your answer through the expenditure as well as the value-added method of computing national 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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You are the manager of Zokia Ghana Limited, a producer of beans. In Ghana, it is possible to produce beans or groundnut using the same resources. Therefore, producers are able to sw itch from beans to groundnut production depending on market conditions. Consequently, Zokia consulted an Economist who estimated the demand function for beans as: Qbd = 600 – 4Pb – 0.03M – 12Pg + 15T + 6Pe + 1.5N where Qbd is the quantity demanded of beans each month, ?? is the average price of beans (in Ghana Cedis), M is the average household income (in GH¢), ?? is the price of groundnut (in GH¢), T is a consumer taste index ranging in value from 0 to 10 (the highest rating), ?? is the price (in GH¢) consumers expect to pay next month for beans, and N is the number of buyers in the market for beans. Assume the following initial values: ??=5, ??= 40, T= 6.5, Pe= 5.25, N= 2000, Qbd = 2479 As a result of the effect of COVID-19 on the economy, the government has proposed an income cut policy. Labour unions…
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