In: Economics
In the first stage of manufacturing each final unit of a product, a firm purchases a key input at a price of $3 per unit. The firm then pays a wage rate of $5 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 $12.
What is the contribution of each unit of output to GDP in the current year?
The contribution of each unit of output to GDP in the current year is?
Ans: The contribution of each unit of output to GDP in the current year is $12.
Explanation:
GDP is defined as the market value of all final goods and services produced in a nationat a particular time period, i.e., a year.
In the above question, since the firm sells every unit of the product for $12, it means contribution of each unit of output to GDP in the current year is $12.