Suppose a silver miner finds a silver nugget and sells the nugget to a mining co

Question

Suppose a silver miner finds a silver nugget and sells the nugget to a mining company for $200. The mining company melts down the silver, purifies it, and sells it to a jewelry maker for $800. The jewelry maker fashions the silver into a necklace that it sells to a department store for $1,000. Finally, the department store sells the necklace to a customer for $1,500. The value added by the silver miner is $ , the value added by the mining company is $ , the value added by the jewelry maker is $ , and the value added by the department store is $ . The total contribution to GDP is $ . Enter whole numbers with no commas or dollar signs. You have a job earning $45426 per year. If the CPI increases from 113 to 136 then how much of a raise do you need in order to avoid experiencing a decrease in your purchasing power? Round to the nearest whole number.

Explanation / Answer

1. The value added by the silver miner is $ 200

The value added by the mining company is $ 600 (i.e. $ 800 - $ 200)

The value added by the jewelry maker is $ 200 (i.e. $ 1,000 - $ 800)

The value added by the department store is $ 500 (i.e. $ 1,500 - $ 1,000)

The total contribution to GDP is $ 1500 (sum of value added i.e. $ 200 + $ 600 + $ 200 + $ 500)

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