**Furniture Production Stages and GDP Contribution**Suppose that furniture production encompasses the following stages:| Stage | Description | Value ||-------|-------------|-------|| Stage 1 | Trees are sold to lumber company. | $800 || Stage 2 | Lumber is sold to furniture company. | $2,000 || Stage 3 | Furniture company sells furniture to retail store. | $5,000 || Stage 4 | Furniture store sells furniture to consumer. | $9,000 |**Instructions:** Enter your responses as a whole number.**a. What is the value added at each stage?**- **Stage 1:** $ - **Stage 2:** $ - **Stage 3:** $ - **Stage 4:** $ **b. How much does this output contribute to GDP?**- **$****c. How much would this output contribute to GDP if the lumber were imported from Canada?**- **$**---**Explanation of Calculation:**To calculate the value added at each stage, subtract the previous stage's cost from the current stage. The contribution to GDP is the total value of the final product sold to the consumer, which is $9,000. If the lumber were imported, subtract the cost of the lumber ($2,000) from the GDP calculation.For educational purposes, students should carefully work through the stages to understand how each contributes to overall economic measurements.

Value addition describes how a good or service's worth rises at every stage of manufacturing. Value…

Suppose that furniture production encompasses the following stages: Stage 1: Trees are sold to lumber company. Stage 2: Lumber is sold to furniture company. Stage 3: Furniture company sells furniture to retail store. Stage 4: Furniture store sells furniture to consumer. Instructions: Enter your responses as a whole number. a. What is the value added at each stage? Stage 1: $ Stage 2: $ Stage 3: $ Stage 4: $ b. How much does this output contribute to GDP? $ $ 800 $ 2,000 $5,000 $9,000 ▬▬▬ c. How much would this output contribute to GDP if the lumber were imported from Canada? $

Suppose that furniture production encompasses the following stages: Stage 1: Trees are sold to lumber company. Stage 2: Lumber is sold to furniture company. Stage 3: Furniture company sells furniture to retail store. Stage 4: Furniture store sells furniture to consumer. Instructions: Enter your responses as a whole number. a. What is the value added at each stage? Stage 1: $ Stage 2: $ Stage 3: $ Stage 4: $ b. How much does this output contribute to GDP? $ $ 800 $ 2,000 $5,000 $9,000 ▬▬▬ c. How much would this output contribute to GDP if the lumber were imported from Canada? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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