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Consider a Car Manufacturer Producing Three Types of Cars: a Luxury

Question 45

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Consider a car manufacturer producing three types of cars: a luxury convertible worth $60 000, a family sedan worth $35 000 and a hatchback worth $23 000. Assume that the shares of input costs for all types are the same. Rank the contribution to GDP for each from highest to lowest and explain why.

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1. Luxury convertibl...

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