4. a mechanic builds an engine and then sells it to a customized body shop for $7,000. the body shop installs the engine in a carand sells the car to a dealer for $20,000. the dealer then sells the finished vehicle for $35,000. a consumer drives off with the car. By how much GDP increase? what is the value added at each step of the production process? How does the total value added compare with the amount by which GDP increased?

4. a mechanic builds an engine and then sells it to a customized body shop for $7,000. the body shop installs the engine in a carand sells the car to a dealer for $20,000. the dealer then sells the finished vehicle for $35,000. a consumer drives off with the car. By how much GDP increase? what is the value added at each step of the production process? How does the total value added compare with the amount by which GDP increased?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 2CQQ

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Suppose that a farmer grows wheat, which she sells to a miller for $10. The miller turns the wheat into flour, which she sells to a baker for $55. The baker turns the wheat into bread, which she sells to consumers for $140. Consumers eat the bread. What is GDP in this economy? Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Consumption 1700 Investment 700 Government Expenditure 100 Exports 50 Imports 40 Using the expenditure approach, calculate GDP for China.
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If consumption is 10, investment 5, government purchases 6, exports 8, and imports 7, what is GDP?
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