The small economy of Pizzania produces three goods (bread, cheese, and pizza), each produced by a separate company. The Bread Cheese Pizza company company company bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company $50 (bread) Cost of inputs $0 $0 35 (cheese) uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods and the difference between the value of goods sold Wages 15 20 75 and the sum of labor and input costs is the firm's profit. The Value of output 50 35 200 accompanying table summarizes the activities of the three companies, when all the bread and cheese produced, are sold to the pizza company as inputs in the production of pizzas. a. Calculate GDP as the value added in production. 90 $ Incorrect b. Calculate GDP as spending on final goods and services. $ Incorrect c. Calculate GDP as factor income. $

The small economy of Pizzania produces three goods (bread, cheese, and pizza), each produced by a separate company. The Bread Cheese Pizza company company company bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company $50 (bread) Cost of inputs $0 $0 35 (cheese) uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods and the difference between the value of goods sold Wages 15 20 75 and the sum of labor and input costs is the firm's profit. The Value of output 50 35 200 accompanying table summarizes the activities of the three companies, when all the bread and cheese produced, are sold to the pizza company as inputs in the production of pizzas. a. Calculate GDP as the value added in production. 90 $ Incorrect b. Calculate GDP as spending on final goods and services. $ Incorrect c. Calculate GDP as factor income. $

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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