Answered

Welcome to Westonci.ca, the Q&A platform where your questions are met with detailed answers from experienced experts. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

A farmer grows wheat, which she sells to a miller for $70. The miller turns the wheat into flour, which she sells to a baker for $120. The baker turns the wheat into bread, which she sells to consumers for $135. Consumers eat the bread. Assume that these transactions account for all economic activity in this economy. GDP in this economy is.

Value added is defined as the value of a producer’s output minus the value of the intermediate goods that the producer buys to make the output. Assuming there are no intermediate goods beyond those previously described, complete the following table by calculating the value added for each of the three producers. Then enter the total value added in the final row.

Producer Value Added
(Dollars)
Farmer
Miller
Baker
Total

The total value added for the three producers in this economy does not equal the economy’s GDP.
a. True
b. False

Sagot :

anthougo

Answer:

a. GDP in this economy is $135.

b. Producer     Value Added

                            (Dollars)

Farmer                     70

Miller                        50

Baker                        15

Total                   $135

c. The total value added for the three producers in this economy does not equal the economy’s GDP.

b. False

Explanation:

Ordinarily, Gross Domestic Product (GDP) is the economic measure of the total value of all the finished goods and services produced within a country's borders in a specific time period, usually a year.  Broadly, it comprises the totality of private consumption, fixed investment, change in inventories, government consumption, and net exports.  On the other hand, value added can be defined as the economic profit made from a business activity.

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.