Question 1 The small economy of Pizzania produces three goods (bread, cheese and pizza), each produced by a separate company. The bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods, and the difference between the value of goods sold and the sum of labor and input costs is the firm's profit. Bread and cheese produced are sold both to the pizza company for inputs in the production of pizzas and to consumers as final goods. The table below summarizes the activities of the three companies. Cost of Inputs Wages Total Revenue Bread Company $0 $25 $100 Cheese Company $0 $30 $60 Pizza Company $50 (bread) $35 (cheese) $75 $200 Calculate the GDP of Pizzania via value added. Show all your calculations

Question 1 The small economy of Pizzania produces three goods (bread, cheese and pizza), each produced by a separate company. The bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods, and the difference between the value of goods sold and the sum of labor and input costs is the firm's profit. Bread and cheese produced are sold both to the pizza company for inputs in the production of pizzas and to consumers as final goods. The table below summarizes the activities of the three companies. Cost of Inputs Wages Total Revenue Bread Company $0 $25 $100 Cheese Company $0 $30 $60 Pizza Company $50 (bread) $35 (cheese) $75 $200 Calculate the GDP of Pizzania via value added. Show all your calculations

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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