Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c }
{ \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$ If the oranges were grown and the jam produced in the year 2009, but the marmalade was sold at The Corner Store in the year 2010, what is the contribution of these transactions to GDP in the year 2009?

Question

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c } 
 { \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$ If the oranges were grown and the jam produced in the year 2009, but the marmalade was sold at The Corner Store in the year 2010, what is the contribution of these transactions to GDP in the year 2009?

Quizplus · Accepted Answer

The contribution to GDP in 2009 is the value added by each company in that year. Citrus Growers Inc. adds $0.75, and Florida Jam Company adds $1.25 ($2.00 - $0.75). The Corner Store's sale in 2010 does not contribute to 2009 GDP. Total for 2009 is $0.75 + $1.25 = $2.00.

Suppose a Jar of Orange Marmalade That Is Ultimately Sold