The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given. Concept Introduction: Gross Domestic Product : It is the money value of final goods and services produced in a year.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Tasks Exercise 1 Assess the following functions: 1. f(x)= x2+6x+2 2.f '(x)=10x-2x2+5 a. Find the stationary points. (5 marks) b. Determine whether the stationary point is a maximum or minimum. (5 marks) c. Draw the corresponding curves (5 marks)

Problem 2: The sales data over the last 10 years for the Acme Hardware Store are as follows: 2003 $230,000 2008 $526,000 2004 276,000 2009 605,000 2005 328,000 2010 690,000 2006 388,000 2011 779,000 2007 453,000 2012 873,000 1. Calculate the compound growth rate for the period of 2003 to 2012. 2. Based on your answer to part a, forecast sales for both 2013 and 2014. 3. Now calculate the compound growth rate for the period of 2007 to 2012. 1. Based on your answer to part e, forecast sales for both 2013 and 2014. 5. What is the major reason for the differences in your answers to parts b and d? If you were to make your own projections, what would you forecast? (Drawing a graph is very helpful.)

Exercise 4A firm has the following average cost: AC = 200 + 2Q – 36 Q Find the stationary point and determine if it is a maximum or a minimum.b. Find the marginal cost function.

Answer 2

Question

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Answer 6

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90

Answer 7

Chapter 6, Problem 1P

To determine

The difference between Income and expenditure approach of measuring GDP is to be explained, the concept of Value added is to explained and the final market price of the flour is to be determined with the help of the data given.

Concept Introduction:

Gross Domestic Product: It is the money value of final goods and services produced in a year.

Answer 8

Expert Solution & Answer

Explanation of Solution

Income and Expenditure are the two different approaches of measuring GDP. Income approach is calculated by adding incomes earned by various factors of production. It includes wages, rent, interest; profits .Whereas expenditure approach is calculated by adding total amount spent on total consumption, government purchases, net exports and investments by firms, households and government.
Value added is net addition made by producer while producing .It is calculated by subtracting cost of intermediate goods involved in production at each stage of production from the selling price of the product. This concept is very important in income approach as it helps in calculating profit when the profits of all intermediate producers are calculated and added. It gets clearer in the following example.
Market price of flour is divided into four stages

Stage 1: Farmer sells to miller at $0.24 . So His value addition is $0.24 .

Stage 2: Miller sells to wholesaler for $0.40 so miller's Value Addition is $0.40−$0.24=$0.16

Stage 3: Wholesaler sells to grocer for $2 so wholesaler’s VA is $2−$0.40=$1.60

Stage 4: Grocer sells to consumer for $0.90 so grocer's VA is $0.90−$2=−$1.10

Final market prices of flour = addition of all Value addition of four stages

= $0.24+$0.16+$1.60+(−$1.10)=$0.90