Table 8-6

-Refer to Table 8-6.Consider the table of production and price statistics for a small economy in 2013.If the economy only produces the four goods listed below,what is GDP for 2013?

Question

Table 8-6
 
-Refer to Table 8-6.Consider the table of production and price statistics for a small economy in 2013.If the economy only produces the four goods listed below,what is GDP for 2013?

Quizplus · Accepted Answer

To calculate the GDP for 2013, we need to sum the total value added of all goods produced. We can calculate the value added of each good by subtracting the intermediate inputs (the value of the goods used in production) from the final price. 
For Good A: 
Value added = ($30 x 1,500) - $10,000 = $35,000 
For Good B: 
Value added = ($20 x 2,000) - $8,000 = $32,000 
For Good C: 
Value added = ($10 x 1,500) - $6,000 = $9,000 
For Good D: 
Value added = ($3 x 1,000) - $2,000 = $1,000 
Total value added = $35,000 + $32,000 + $9,000 + $1,000 = $77,000 
Therefore, the GDP for 2013 is $77,000 x 5.6 = $428,000.

Table 8-6 -Refer to Table 8-6.Consider the Table of Production and Price