Chapter 5, Problem 1E

To determine

The below table lists the stages in the production of a personal computer. Find the value of the computer in GDP.

Stage	Value Added
Company Manufacture	$100
Assembly	$250
Wholesaler	$500
Retailer	$1,850

Answer to Problem 1E

The value of computer in the GDP is $\$1850$.

Explanation of Solution

The real value of GDP at each stage is calculated as follows:

Stage	Value Added	Real Value Added
Components Manufacture	$\$100$	$\$100$
Assembly	$\$250$	$\$250-\$100=\$150$
Wholesaler	$\$500$	$\$500-\$250=\$250$
Retailer	$\$1850$	$\$1850-\$500=\$1350$
Total Value	$\$1850$

Hence, the value of computer in the GDP is $\$1850$

Economics Concept Introduction

Gross Domestic Product- Gross Domestic Product or GDP is referred to as the market value of all the services and final goods which has been produced in a period.