Reference no: EM133253720

Assignment:

A small tropical economy produces three goods: apples, oranges, and juice. Each of these goods is produced by a separate firm. Apples and oranges are sold to the juice company for inputs in the production of juice and to consumers as ?nal goods.

Apple producer owns all the apple trees and in the current year produces 5 million apples, which are sold at $1.00 each. Apple producer pays wages 01:51 million to its workers (which are also consumers in this economy). and $1 million in taxes to the government.

Orange producer owns all the orange trees and in the current year produces 6 million oranges, which are sold at $1.50 each. Orange producer pays wage of $2.5 million to its workers, and $0.5 million in interest on a loan to some consumers. Orange producer pays 52 million in taxes to the government.

The juice company purchases 2 million apples and 2 million oranges and uses them as inputs in the production of juice. The company produces 3 million gallons of juice in the current year and sells them to consumers at $5 each. The juice company pays wages of $3 million to its workers, and $1 million in interest on a loan to some consumers. The company pays $1 million in taxes to the government. Consumers receive the wages paid by all producers, as well as after-tax profits.

Consumers pay $2 million in taxes to the government.

The government uses all tax revenue as wages for the army.

a. Calculate GDP via the Product Approach (show your detailed calculations)

b. Calculate GDP via the Expenditure Approach (show your detailed calculation)

c. Calculate GDP via the Income Approach (show your detailed calculations)