Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
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Chapter 15, Problem 8PA

Sub part (a):

To determine

The GDP of the economy.

Sub part (b):

To determine

Value addition.

Sub part (c):

To determine

Total Value Added.

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Students have asked these similar questions
A farmer grows wheat, which she sells to a miller for $100. The miller turns the wheat into flour, which she sells to a baker for $150. The baker turns the wheat into bread, which she sells to consumers for $180. Consumers eat the bread. a. What is GDP in this economy? Explain. b. Value added is defined as the value of a producer’s output minus the value of the intermediate goods that the producer buys to make the output. Assuming there are no intermediate goods beyond those described above, calculate the value added of each of the three producers. c. What is total value added of the three producers in this economy? How does it compare to the economy’s GDP? Does this example suggest another way of calculating GDP?
A farmer produces milk, which he sells to a mill for 1000 tk. The mill turns the milk into cream, which he sells to a baker for 1500 tk. The baker turns the cream into a cake, which he sells to consumers for 2000 tk. Consumers eat the cake.a. What is GDP in this economy? Explain.b. What is the total value added of the three producers in this economy? Does this example suggest another way of calculating GDP?
What is the change in GDP according to the *****income**** approach? How do the inputs that make up Net Domestic Income (wages, interest, and profits) change?   I noticed that using the expenditure approach the GDP DECREASED by 800 dollars. My income approach is not working out.
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