MNLOGS harvested logs (with no inputs from othher companies) from their property in northern Minnesota. They sold these logs to MNLumber for $1,500 and MNLumber cut and planed thelogs into lumber. MNLumber then sold the lumber for $3,000 to MNFurniture. MNFurniture used the lumber to produce 100 tables that they sold to customers for $80 each.Instructions: Enter your responses as whole numbers.a. Complete the table below to calculate the value added by each firm.Cost of purchased inputsCompanyRevenuesValue added$MNLOGS$$$MNLumber$$MNFurnitureb. Suppose that all of these transactions took place in 2014. By how much did GDP increase because of these transactions?$c. Suppose that MNLogs harvested the logs in October 2014 and sold them to MNLumber in December 2014. MNLumber then sold the finished lumber to MNFurniture in April 2015 andMNFurniture sold all 100 tables during the rest of 2015. By how much did GDP increase in 2014 and 2015 because of these transactions?GDP increase in 2014: $GDP increase in 2015: $EA

Value added by a firm is the difference between revenues earned by the firm and cost it incurs.

Answered: MNLOGS harvested logs (with no inputs…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.3P

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MNLogs harvested logs (with no inputs from other companies) from their property in northern Minnesota. They sold these logs to MNLumber for $1,000 and MNLumber cut and planed the logs into lumber. MNLumber then sold the lumber for $2,500to MNFurniture. MNFurniture used the lumber to produce 100 tables that they sold to customers for $60 each.Instructions: Enter your responses as whole numbers.a. Complete the table below to calculate the value added by each firm. Company Revenues Cost of purchased inputs Value added MNLogs $ $ $ MNLumber $ $ $ MNFurniture $ $ $ b.Suppose that all of these transactions took place in 2016. By how much did GDP increase because of these transactions?$ c.Suppose that MNLogs harvested the logs in October 2016 and sold them to MNLumber in December 2016. MNLumber then sold the finished lumber to MNFurniture in April 2017 and MNFurniture sold all 100 tables during the rest of 2017. By how much did GDP increase in 2016 and 2017 because of…
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