Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 5, Problem 1E
To determine
The below table lists the stages in the production of a personal computer. Find the value of the computer in
| Stage | Value Added |
| Company Manufacture | $100 |
| Assembly | $250 |
| Wholesaler | $500 |
| Retailer | $1,850 |
Expert Solution & Answer
Answer to Problem 1E
The value of computer in the GDP is
Explanation of Solution
The real value of GDP at each stage is calculated as follows:
| Stage | Value Added | Real Value Added |
| Components Manufacture |
|
|
| Assembly |
|
|
| Wholesaler |
|
|
| Retailer |
|
|
| Total Value |
|
Hence, the value of computer in the GDP is
Economics Concept Introduction
Gross Domestic Product- Gross Domestic Product or GDP is referred to as the market value of all the services and final goods which has been produced in a period.
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Jim's Bank Account for the Year to 30 April 2008:
We will start by calculating the balance of the business bank account, using the transactions provided.
Opening Balance:
Jim initially deposited €150,000 into his business bank account on 1 May 2007.
Transactions:
Receipts:
Cash Sales (May 2007 to April 2008): €96,000
Credit Sales (Business customers): €19,600 (Note: This amount is not yet received as it is on credit, but it will be included in the Income Statement and not the bank balance at this stage.)
Bank receipts from credit customers (amount owed at 30 April 2008): €6,800
Total Receipts:€96,000 (Cash Sales) + €6,800 (credit customer payments) = €102,800
Payments/Expenditures:
Lease Payment (Paid in advance for five years): €50,000
Shop Fitting: €10,000
Assistant’s Wages: €250 per month × 12 months = €3,000
Telephone expenses: €800
Heat & Light expenses: €1,000
Jim’s withdrawals for personal expenditure: €1,000 × 12 months = €12,000
Accounting Fee (after the year-end):…
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