In the first stage of manufacturing each final unit of a product, a firm purchases a...
In the first stage of manufacturing each final unit of a product, a firm purchases a key input at a price of $4 per unit. The firm then pays a wage rate of S3 for the time that labor is exerted, combining an additional $2 of inputs for each final unit of output produced. The firm sells every unit of the product for $10. What is the contribution of each unit of output to GDP in the current year?
Homework Answers
ans......
as per expenditure method the GDP calculated and the GDP is
considered only the final goods and services produced
so the each unit of output will add $10 to the GDP.
Input is intermediate good.........not calculated in GDP
wage.....also not calculated in GDP (by expenditure method)
the indirect inputs also input and not calculated so directly final
consumption value is added to the GDP
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In the first stage of manufacturing each final unit of a
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