Question.5149 - Homework Assignment 1Answer the following questions:1) Why does income=expenditure=GDP? Explain. 2) Which contributes more when measuring GDP, a new diamond necklace purchased by a wealthy person, or a bottle of juice purchased by a thirsty person? Explain. 3) A small economy produced the following final goods and services during a given month: 3 million pounds of food, 50,000 shirts, 20 houses, 50,000 hours of medical services, 1 automobile plant, and 2 tanks. Calculate the value of this output at the following market prices:$1 per pound of food$20 per shirt$50,000 per house$20 per hour of medical services$1 million per automobile plant$500,000 per tank 4) Explain why comparing the GDPs of various nations might not tell you which nation is better off. 5) Mario works part-time at Pizza Hut and earns an annual wage plus tips of $15,000. He sold 4,000 pizzas at $5 per pizza during the year. He was unemployed part of the year, so he received unemployment compensation of $3,000. During the past year, Mario bought a used car for $1,000. Using the expenditure approach, how much has Mario contributed to GDP?
Answer Below:
We xxx that xxxxxx spending xxx the xxxxx of xxxxxxxxxx produced xxxxxxx whenever xx buy xxxxxxxxx it xxxxxxx the xxxxxx of xxx seller xxx seller xxxx uses xxxxx income xx pay xxx workers xxxxxxxxx and xxxxxx Therefore xxx total xxxxxx people xxxxx on xxxxx and xxxxxxxx is xxx same xx the xxxxx income xxxxxx earn xxxx producing xxxx A xxx diamond xxxxxxxx purchased xx a xxxxxxx person xxxxxxxxxx more xx the xxx since xx has xxx larger xxxxxx price xxx s xxx that xxxxxxx necklace xx sold xxx and xxxxx bottle xx sold xxx From xxxx we xxx understand xxxx diamond xxxxxxxx contributes xxxx to xxx GDP xx measures xxxxx in xxxxxxx We xxxx to xxxxxxxx each xxxxxxx by xx s xxxxx and xxx them xx Therefore xxxxx of xxx output xx the xxxxx economy xx million xxxxxxxxx GDPs xx nations xxxxxx tell xx which xxxxxx is xxxxxx off xxxxxxx of xxxxxxx factors xxx size xx the xxxxxxxxxx differs xx each xxxxxx A xxxxx GDP xxxxx reflect x large xxxxxxxxxx Prices xxx the xxxx of xxxxxx also xxxxxxx across xxxxxxxxx For xxxxxxxx the xxxxx of xx more xx some xxxxxx whereas xx is xxxx in xxxxx places xxxx GDP xxxx not xxxx how xxxxxx or xxxxxx is xxxxxx It xxxx ignores xxxxxx like xxxx time xxxxxx clean xxx safety xx happiness xxxxx Sales xx Pizzas xxxxxx Wages xxxx Unemployment xxxxxxxx Used xxx From xxxx we xxx conclude xxxx used xxx is xxx counted xxxxxxx it xxx produced xx the xxxx and xx does xxx adds xx the xxxxxxx GDP xxxxxxxxxxxx benefit xx also xxx counted xxxxxxx it xx the xxxxxxx transferred xx Mario xxx not xxx payment xxx new xxxxx or xxxxxxxx Wages xxxx is xxxxxxx included xx the xxxxx of xxxxxx So xx don x count xxxx again xxxxxxx only xxxxxx toward xxx because xx s xxx production xxxxxxxxx Mario x contribution xx GDPMore Articles From Micro Economics
.ico)
.ico)
.ico)
