Question
In: Economics
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 $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?
Solutions
Expert Solution
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.
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