Suppose in 2000, Company X hires Designer Y to design a new car. Company X pays Y $1,000 as the designer fee and the intellectual property right transfers to X. Based on that design, Company X spends another $10,000 to build the car. Assume that Company X sells the car at cost and there is no profit in that year. What is the contribution of this transaction to the GDP of 2000? $1,000 $11,000
Suppose in 2000, Company X hires Designer Y to design a new car. Company X pays Y $1,000 as the designer fee and the intellectual property right transfers to X. Based on that design, Company X spends another $10,000 to build the car. Assume that Company X sells the car at cost and there is no profit in that year. What is the contribution of this transaction to the GDP of 2000? $1,000 $11,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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I need an explanation why the answer is 11,000. Thank you.
![1
Suppose in 2000, Company X hires Designer Y to design a new car. Company X pays Y $1,000 as the designer fee
and the intellectual property right transfers to X. Based on that design, Company X spends another $10,000 to
build the car. Assume that Company X sells the car at cost and there is no profit in that year. What is the
contribution of this transaction to the GDP of 2000?
$1,000
$10,000
$12,000
$11,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc1c72ad4-0cde-43c6-b851-0d539c78ca72%2Ff161133f-13aa-4f96-b336-7635d80a9ff2%2F9qsqd3i_processed.png&w=3840&q=75)
Transcribed Image Text:1
Suppose in 2000, Company X hires Designer Y to design a new car. Company X pays Y $1,000 as the designer fee
and the intellectual property right transfers to X. Based on that design, Company X spends another $10,000 to
build the car. Assume that Company X sells the car at cost and there is no profit in that year. What is the
contribution of this transaction to the GDP of 2000?
$1,000
$10,000
$12,000
$11,000
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