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An economy consists of a silver mining company, a jewelry manufacturer, a jewelry retailer, and households/workers.

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n economy consists of a silver mining company, a jewelry manufacturer, a jewelry retailer, and;households/workers. The mining company pays its workers C=400,000 to mine 150kg of silver. The;silver is then sold to the jewelry manufacturer for C=500,000 who pays its workers C=450,000 to make;silver necklaces, which are sold to a retailer forC=1,200,000. The retailer sells the necklaces to consumers;and after paying sales staff C=100,000 makes a pro.t of C=200,000.;(a) Using the ?production of final goods? approach, what is the GDP of this economy?;(b) What is the value added at each stage? Calculate GDP using the ?value-added? approach.;(c) What are the wages and pro.ts earned by each sector? Calculate GDP using the income approach.

 

Paper#18233 | Written in 18-Jul-2015

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