The accompanying table summarizes the activities ofthe three companies when all the bread and cheeseproduced are sold to the pizza company as inputs in theproduction of pizzas.BreadCheesePizzacompany companycompanyCost of inputs$0$0$50 (bread)35 (cheese)Wages152075Value of output5035200a. Calculate GDP as the value added in production.b. Calculate GDP as spending on final goods andservices.c. Calculate GDP as factor income. 4.) The small economy of Pizzania produces three goods(bread, cheese, and pizza), each produced by a separatecompany. The bread and cheese companies produce allthe inputs they need to make bread and cheese, respec-tively. The pizza company uses the bread and cheesefrom the other companies to make its pizzas. All threecompanies employ labor to help produce their goods,and the difference between the value of goods sold andthe sum of labor and input costs is the firm's profit.

Gross domestic product (GDP) is the standard proportion of the worth added made through the…

Answered: a. Calculate GDP as the value added in…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Measuring A Nation's Income

Section: Chapter Questions

Problem 9PA

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Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
Explain briefly whether each of the following would cause GDP to overstate or understate the degree of change in the broad standard of living. The environment becomes dirtier The crime rate declines A greater variety of goods become available to consumers Infant mortality declines
As technological change makes us more sedentary and food costs increase, obesity is likely. What factors do you think may limit obesity?
The United States exports 14 of GDP while Germany exports about 50 of its GDP. Explain stat that means.
Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?
What are the main components of measuring GDP with what is demanded?
Economics. Suppose the following information was published by the Australian Bureau of Statistics in 2017: Item Amount (AUD billion) Household consumption 5,029.81 Government consumption 20,340.92 Exports 1,386.39 Value of cocaine seized at Sydney Airport 20,500 Value of intermediate goods in tractor manufacturing 502,003 Gross private domestic investment 352.69 Imports 386.95 Components used in the manufacture of cars 40,000 Gifts 15,236 Government investment 88.19 Value of second-hand goods 500.00 Value of banned endangered species elephant tasks seized at Melbourne Airport 600.00 Use the information provided to calculate Australia’s GDP in 2017
What counts as GDP (II)? By how much does GDP rise in each of the fol-lowing scenarios? Explain. (a) A computer company buys parts from a local distributor for $1 million,assembles the parts, and sells the resulting computers for $2 million.(b) A real estate agent sells a house for $200,000 that the previous ownershad bought 10 years earlier for $100,000. Te agent earns a commissionof $6,000.(c) During a recession, the government raises unemployment benefts by$100 million.(d) A new U.S. airline purchases and imports $50 million worth of airplanesfrom the European company Airbus.
Suppose you are provided with the following information about an economy that consists of just three firms: STEEL COMPANYi. Revenues from sales Rs. 400ii. Expenses (wages) Rs. 340iii. Profits Rs. 60CAR COMPANYi. Revenues from Sales Rs. 1000ii. Expenses1. wages Rs. 5002. Steel Purchases Rs. 400iii. Profits Rs. 100SERVICING COMPANYi. Revenues from Sales Rs. 200ii. Expenses (wages) Rs. 160iii. Profits Rs. 40 (a). Compute the GDP in this economy using the following approaches:1. Final goods approach2. Value-added approach3. Income approach
Please help with questions D & E: Consider an economy that produces and consumes shoes and houses. In the table below are data for two different users. 2000 2001 Price of a house $120,000 $145,000 Number of houses produced 1000 1050 Price of a pair of shoe $150 $170 Number of pairs of shoes produced 650,000 525,000 Year 2000 Year 2001 Price of a house $120,000 Price of a pair of shoes $150, $170 Number of houses produced 1,000 Number of pairs of shoes 650,000, 525,000 (a) What is the Consumer Price Index (CPI)? (b) Calculate the CPI for both years. (c) Calculate the rate of inflation for 2001 using the CPI. (d) Calculate the GDP deflator for both years. (e) Calculate the rate of inflation for 2001 using the GDP deflator. Please help with questions D & E only.

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a. Calculate GDP as the value added in production. b. Calculate GDP as spending on final goods and carvicar