QUESTION 1 The small economy of the United States of Sustainabilit has only thre

Question

QUESTION 1 The small economy of the United States of Sustainabilit has only three companies: a bicycle manufacturer, a wind energy producer, and an organic cheese company. The only costs these compa depreciation, and no imports or exports. Unless otherwise noted, assume all the output is sold to consumers as final goods, (In the table, youl se that some of the wind energy nies have are wages and energy. Assume there are no interest payments, no rent, no energy was sold to other businesses as intermediate goods. The rest of the wind energy was The companies' profits Value of output (total revenues) - total costs. sold to consumers as final goods.) e below. That is, compute each company's profit and each company's value-added. Do not use dollar signs or decimal points Bicycle Company Value of output (total revenue) $100 Purchases from other firms $25 wind energy Wages Profit Wind Energy Company $150 $0 $70 Organic Cheese Company $50 $30 wind energy $20 $50 Value Added Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Explanation / Answer

Given, The companies' profit = Value of output (Total revenue) - Total costs.

Also, we know Value added = Value of output - Cost of raw materials bought from other firms( Purchases from other firms).

[Note: Wages are a part of value added]  

Given below are the profits and value added respectively for the different firms:

Bicycle company

Profit = $( 100 - 25 - 50) = $ 25

Value-added = $ ( 100 -25) = $ 75.

Wind Energy company

Profit = $( 150 - 70) = $ 80

Value-added = $ ( 150 - 0 ) = $ 150

Organic Cheese company  

Profit = $( 50 - 30- 20) = $ 0

Value-added = $ ( 50 -30 ) = $ 20.

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