What is the value added in economy

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Reference no: EM133439578

Question: A farmer grows wheat, which she sells to a miller for $100. The miller turns the wheat into flour, which she sells to the baker for $150. The baker turns the wheat into bread, which she sells to the consumers for $180. Consumers eat the bread.

(a) What is the GDP of this economy if this is the only production? Explain your answer in no more than 2 sentences

(b) What is the value added in this economy? Hint - Value added at each stage of production is the revenue earned - cost. When you add up value-added at each stage of production, you get the total value-added. Take the farmer's cost as 0.

Reference no: EM133439578

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