What is the value of gdp in economy

Reference no: EM13859834

An economy has two firms. Households own all of the labor services and all of the capital, which they rent out to the firms. Firm A produces sugar using labor services worth $10 and capital services worth $20. It sells $15 worth of sugar to households and $15 of sugar to firm B; a bakery. The bakery produces cakes worth $60 that it sells directly to households. Households earn $30 in wages from Firm A and B combined,

A. What is the value of GDP in this economy?

B. What is the value added by firm A?

c. What is the value added by firm B?

D. How much does the household earn in profit from firms A and B combined?

E. What is total value of intermediate goods and produced in the economy?

Reference no: EM13859834

Questions Cloud

Various parts of the circular flow diagram representing : Explain briefly the various parts of the circular flow diagram representing the interactions between households and firms in a simple economy.

Draw a cash flow timeline : a. Draw a cash flow timeline for 1 day's sales under existing credit policy b. What is the value effect (ΔZ) of this decision on 1 day's sales?

Real money demand is greater than the real money supply : If the real money demand is greater than the real money supply, interest rates must rise to reach equilibrium in the money market as institutions sell bonds to obtain more money. The federal government’s control of the money supply, which influences ..

What is nat and what is it used for? : What is NAT and what is it used for?

What is the value of gdp in economy : An economy has two firms. Households own all of the labor services and all of the capital, which they rent out to the firms. Firm A produces sugar using labor services worth $10 and capital services worth $20. It sells $15 worth of sugar to househol..

Utility function-indifference curve is tangent : Romans utility function os U(x,y)=6xy. The prices of goods x and y are $12 and $15. The indifference curve is tangent to his budget constraint, where he is consuming 20 units of good x. How many units of good y must he be consuming?

Bank evaluation process : Assume that you are nearing graduation and have applied for a job with a local bank. The bank's evaluation process requires you to take an examination that covers several financial analysis techniques.

Determining target market and positioning of your product : Prepare a 350- to 700-word summary with a focus on determining the target market and positioning of your product or service

What the term spontaneous order means : What are the advantages of E-Commerce? Name all the specific cyber issues that have necessitated new laws? Explain what the term “spontaneous order” means? Name all of the factors that, according to Lawrence Lessig, govern both real space and cybersp..

User Account

All Pages