Suppose that Mr. Green Jeans sells $5,000 of wheat to Big Ben Bakery. Big Ben uses the wheat to make flour and then hamburger buns, which it sells to Hamburger Heaven for $11,000. Hamburger Heaven also buys $20,000 of beef from a rancher. Hamburger Heaven uses the beef and buns to make 10,000 hamburgers, which are sold for $5 each. How much do these transactions add to GDP?

Question

Quizplus · Accepted Answer

The total value added to GDP is the final sales price of the hamburgers, which is $50,000 ($5 per hamburger x 10,000 hamburgers). The value of the wheat and beef sold earlier in the production process are considered intermediate goods and not included in GDP to avoid double counting.

Suppose That Mr