farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is the valued added by each person? b. Should the pumpkins be included in GDP? Explain your answer. c. Why does GDP not include in goods that are resold?

farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is the valued added by each person? b. Should the pumpkins be included in GDP? Explain your answer. c. Why does GDP not include in goods that are resold?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 11P

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