What is the value of output in this economy

Reference no: EM131134383

Consider an economy that consists only of those who bake bread and those who produce its ingredients. Suppose that this economy's production is as follows: 1 million loaves of bread (sold at $2 each); 1.2 million pounds of flour (sold at $1 per pound); and 100,000 pounds each of yeast, sugar, and salt (all sold at $1 per pound). The flour, yeast, sugar, and salt are sold only to bakers, who use them exclusively for the purpose of making bread.

a. What is the value of output in this economy (i.e., nominal GDP)?

b. How much value is added to the flour, yeast, sugar, and salt when the bakers turn them into bread

Reference no: EM131134383

Questions Cloud

Determine the total resistance and current : A 12 V battery, an ammeter, a 5.0 A fuse (which will burn out if more than 5.0 A of current is in the circuit), and several 10.0 lamps are used in an experiment to find the effect of connecting resistances in parallel. Determine the total resistan..

What are some problems with this interpretation : Which do you think is the biggest problem with it, and why?

Calculate real gdp do affect the calculated growth rate : Your answer should demonstrate that the prices that are used to calculate real GDP do affect the calculated growth rate, but typically not by very much.

Write a research paper on an overview of significant trends : Write a research paper on an overview of the significant trends and issues facing special education today.- Identify a minimum of 5 trends.

What is the value of output in this economy : How much value is added to the flour, yeast, sugar, and salt when the bakers turn them into bread

What happened to the hurricane once it hit land : What happened to the Hurricane once it hit land? Explain the general pathway of typhoons in the eastern Pacific Ocean. Explain the general pathway of hurricanes in the Atlantic Ocean.

Given the circumstance surrounding : a little more than 10 months ago, luke bought 300 shares of stock at $40 per share. Since then, the price of the stock has risen to $75 per share.

Why might the cpi overstate the rate of inflation : Suppose a country's CPI increased from 2.1 to 2.3 in the course of 1 year. Use this fact to compute the rate of inflation for that year. Why might the CPI overstate the rate of inflation?

Write a paper in which you use a risk assessment methodology : Prepare 1,400- to 1,750-word paper in which you use a risk assessment methodology to assess the key principles of external building security.

User Account

All Pages