Question

suppose that a farmer grows wheat which she sells to a miller for rupees 10.The miller turns the wheat into flour which she sells to a baker for rs 55.The bakers turn the wheat into muffins which she sells to consumers for rs 120 .Consumers eat the muffins 1)what is the value added by farmers 2)what is the value added by Miller 3)what is the value added by the baker 4)what is the GDP in economy using the value-added approach​

Answer 1

Explanation:

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Answer 2

Explanation:

GDP can be depicted as the final market value of all the finished goods & services in an economy. Here, in this case, the GDP of this nation will be $180 as the final value of the bread that a consumer pays is $180 which is determined by subtracting the price paid by the consumers ($180) and the initial cost incurred by the farmer ($0). The value added by each level of output is determined by value of producer’s output minus value of the intermediate good that a producer buy. Here in the case,.A farmer grows wheat, which she sells to a miller for $100. The miller turns the wheat into flour, which she sells to a baker for $150. The baker turns the wheat into bread, which she sells to consumers for $180. Consumers eat the bread. a. What is GDP in this economy? Explain. b. Value added is defined as the value of a producer’s output minus the value of the intermediate goods that the producer buys to make the output. Assuming there are no intermediate goods beyond those described above, calculate the value added of each of the three producers

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