The following information relates to the daily production in an economy, Candyla
ID: 1121929 • Letter: T
Question
The following information relates to the daily production in an economy, Candyland: Item Cakes Chocolate Sugar Output $120 $120 $40 Further information: ° $50 of the chocolate and $8 of sugar is purchased by the baker to make cakes. ° $12 of sugar is purchased by the chocolate marker to make chocolate. ° There are no intermediate inputs for sugar production Use the above information to answer questions 9-11. 9) The value-added of the cake maker to the Candyland's daily GDP is A) $120 B) $112 C) $70 D) $62 E) $40 10) The value-added of the chocolate producer to the Candyland's daily GDP is A) $120 B) $117 C) $108 D) $%98 E) $62 11)The daily GDP of the Candyland is A) $280 B) $250 C) $240 D) $210 E) $190Explanation / Answer
GDP is the value of all final goods and services produced in an economy. In order to avoid double counting the value of intermediate goods are reduced from the final goods produced.
Ans. 9. $ 62.
Value added = final output - intermediate goods used = 120 -50-8 = $62.
For making cake chocolate and sugar were used.
Ans. 10. c. $108
Value added = final output - intermediate goods used = 120-12 = $108
For making chocolate sugar was used.
Ans. 11. d. $210
Total value added = value of cake added + Value of chocolate added + Value of sugar added = $62+$108+$40 =$210
Since there was no intermediate good used in sugar production whole value of sugar produced will be taken.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.