Question

38. A farmer sells five pounds of pecans to a Smith's Fresh Pecans for $10 Smith's Fresh Pecans resells are shelled and canned and sold for a total of three pounds for S4.50 per pound. The remaining pecans 00 Taking these transactions into account, how much is added to GDP? a. b. $29.50 c. $21.50 d. $31.50 3x45t 2x8

Answer 1

C. GDP is calculated by adding the value added at each stage of production of pecans.

GDP is

$10 is added at the first stage.

The pecans are sold for $4.50 in the second stage. The value added is ($4.50 - $2.00) x 3 pounds= $7.50.

In the third stage, value added is ($8.00 - $4.00)= 4

Value added= $10 + $7.50 + $4.00= $21.50.

The initial cost is $10/5 pounds=$2 per pound.