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Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $

Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter19: The Macroeconomic Perspective
Section: Chapter Questions
Problem 28P: Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100...
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Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $
Transcribed Image Text:Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4500 tonnes of wheat, sells 1500 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 30,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $20,000 in wages. In addition to the 30,000 loaves of bread consumers buy from firm B, consumers import and consume 35,000 loaves of bread, and they pay $1 per loaf for this imported bread. Calculate gross domestic product using (a) the product approach, (b) the expenditure approach, and (c) the income approach. a. Using the product approach, the value added by firm A is $ the value added by firm B is $ and GDP in this economy is $
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