What is the value added at each stagestage 1stage 2stage3stage 4 how much does this output contribute to GDP? how much would the output contribute to GDP if the lumber were imported from Canada? **Title: Understanding the Stages of Furniture Production and GDP Contribution**Suppose that furniture production encompasses the following stages:- **Stage 1**: Trees are sold to a lumber company ($1,000).- **Stage 2**: Lumber is sold to a furniture company ($2,500).- **Stage 3**: The furniture company sells furniture to a retail store ($6,000).- **Stage 4**: The furniture store sells furniture to the consumer ($12,000).**Instructions**: Enter your responses rounded to the nearest whole number.### Questions:**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?**- $ _______### Explanation of Calculation:**Value Added**: The value added at each stage is calculated by subtracting the cost of the previous stage from the current stage.1. **Stage 1**: Since this is the initial stage, the value added is the entire amount: - $1,0002. **Stage 2**: Subtract the cost of trees (Stage 1) from the cost of lumber (Stage 2): - $2,500 - $1,000 = $1,5003. **Stage 3**: Subtract the cost of lumber (Stage 2) from the cost of furniture sold to the retail store (Stage 3): - $6,000 - $2,500 = $3,5004. **Stage 4**: Subtract the cost of furniture sold to the retail store (Stage 3) from the cost of furniture sold to the consumer (Stage 4): - $12,000 - $6,000 = $6,000**Total Contribution to GDP**: To determine the total contribution to GDP, sum the value added at each stage:- $1,000 (Stage 1) + $1,500 (Stage 2) + $3,500 (Stage 3) + $6,000 (Stage 4) = $12,000

Gross domestic product refers to the market value of all final goods and services produced in an…

Answered: What is the value added at each stage…

What is the value added at each stage stage 1 stage 2 stage3 stage 4 how much does this output contribute to GDP? how much would the 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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Question

What is the value added at each stage

stage 1

stage 2

stage3

stage 4

how much does this output contribute to GDP?

how much would the output contribute to GDP if the lumber were imported from Canada?

**Title: Understanding the Stages of Furniture Production and GDP Contribution**

Suppose that furniture production encompasses the following stages:

- **Stage 1**: Trees are sold to a lumber company ($1,000).
- **Stage 2**: Lumber is sold to a furniture company ($2,500).
- **Stage 3**: The furniture company sells furniture to a retail store ($6,000).
- **Stage 4**: The furniture store sells furniture to the consumer ($12,000).

**Instructions**: Enter your responses rounded to the nearest whole number.

### Questions:

**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?**

- $ _______

### Explanation of Calculation:

**Value Added**: The value added at each stage is calculated by subtracting the cost of the previous stage from the current stage.

1. **Stage 1**: Since this is the initial stage, the value added is the entire amount:
- $1,000
2. **Stage 2**: Subtract the cost of trees (Stage 1) from the cost of lumber (Stage 2):
- $2,500 - $1,000 = $1,500
3. **Stage 3**: Subtract the cost of lumber (Stage 2) from the cost of furniture sold to the retail store (Stage 3):
- $6,000 - $2,500 = $3,500
4. **Stage 4**: Subtract the cost of furniture sold to the retail store (Stage 3) from the cost of furniture sold to the consumer (Stage 4):
- $12,000 - $6,000 = $6,000

**Total Contribution to GDP**: To determine the total contribution to GDP, sum the value added at each stage:

- $1,000 (Stage 1) + $1,500 (Stage 2) + $3,500 (Stage 3) + $6,000 (Stage 4) = $12,000

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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