A farmer sells five pounds of pecans to a Smith's Fresh Pecans for $10.Smith's Fresh Pecans resells three pounds for $4.50 per pound.The remaining pecans are shelled and canned and sold for a total of $8.00 Taking these transactions into account,how much is added to GDP?

Question

Quizplus · Accepted Answer

Only the final products and services sold to the end-user contribute to GDP. In this case, the five pounds of pecans sold by the farmer do not count as they are intermediate goods. The retail sale of three pounds by Smith's Fresh Pecans for $4.50 per pound is included as it is a final sale. The sale of canned pecans for $8 is also included in GDP. Therefore, the total contribution to GDP is $4.50 x 3 + $8 = $21.50.

A Farmer Sells Five Pounds of Pecans to a Smith's