Question
In: Economics
Consider an island that has two producers: a coconut farm and a restaurant. The coconut farm...
Consider an island that has two producers: a coconut farm and a restaurant. The coconut farm produces coconuts by hiring households on the island to harvest them from trees. It sells some coconuts to households, some coconuts to the restaurant, and some coconuts to the government. It sells $20 million worth of coconuts to the government, $30 million worth of coconuts to households, and $15 million worth of coconuts to the restaurant. It pays $50 million in wages and no taxes, and distributes its profits to the households that own it in the form of dividends. The restaurant uses coconuts and labor hired from households to produce restaurant meals, which it sells to the household. It sells $100 million worth of restaurant meals, pays $35 million in wages, pays $30 million in taxes, and distributes its (after tax) profits to the households that own it in the form of dividends. The government uses the tax revenue it collects to provide national defense by fielding an army. It feeds the soldiers $20 million worth of coconuts and pays them $10 million in wages.
a.) Compute GDP using the value added approach. Show all work.
b.) Compute GDP using the income approach. Show all work.
c.) Compute GDP using the expenditure approach. Show all work.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Consider a simple example economy where there are two goods, coconuts and restaurant meals (coconut-based). There...
Consider a simple example economy where there are two goods,
coconuts and restaurant meals (coconut-based). There are two firms.
A coconut producer collects and sells 10 million coconuts at $2.00
each. The firm pays $5 million in wages, $0.5 million in interest
on an old loan, and $1.5 million in taxes to the government. We
also know that 4 million coconuts are sold to the public for
consumption, and 6 million coconuts are sold to the restaurant
firm, which uses...
consider Consider the hypothetical example of dominion Island that has firms producing only two goods, gold...
consider
Consider the hypothetical example of dominion Island
that has firms producing only two goods, gold and cotton, the
proceeds of which it uses to purchase other goods and services from
neighboring islands through its banks. Assuming that all other
institutions in an economy are prevalent in this island, discuss
the circular flow of income and spending in dominion Island
Problem 9.41 A firecracker in a coconut blows the coconut into three pieces. Two pieces of...
Problem 9.41
A firecracker in a coconut blows the coconut into three pieces.
Two pieces of equal mass fly off south and west, perpendicular to
each other, at 20 m/s . The third piece has twice the mass as the
other two.
Part A
What is the speed of the third piece?
Express your answer using two significant figures.
Part B
What is the direction of the third piece? Give the direction as
an angle east of north.
Express your...
Consider the hypothetical example of Dominion Island that has firms producing only two goods, gold and...
Consider the hypothetical example of Dominion Island that has
firms producing only two goods, gold and cotton, the proceeds of
which it uses to purchase other goods and services from
neighbouring islands through its banks. Assuming that all other
required institutions in an economy are prevalent in this island,
discuss the circular flow of income and spending in Dominion
Island. No diagram is required.
Consider the hypothetical example of Dominion Island that has firms producing only two goods, gold and...
Consider the hypothetical example of Dominion Island that has
firms producing only two goods, gold and cotton, the proceeds of
which it uses to purchase other goods and services from neighboring
islands through its banks. Assuming that all other required
institutions in an economy are prevalent in this island, discuss
the circular flow of income and spending in Dominion Island. No
diagram is required.
Consider the hypothetical example of Dominion Island that has firms producing only two goods, gold and...
Consider the hypothetical example of Dominion Island that has
firms producing only two goods, gold and cotton, the proceeds of
which it uses to purchase other goods and services from
neighbouring islands through its banks. Assuming that all other
required institutions in an economy are prevalent in this island,
discuss the circular flow of income and spending in Dominion
Island. No diagram is required.
consider the hypothetical example of Dominion Island that has firms producing only two goods, gold and...
consider the hypothetical example of Dominion Island that has
firms producing only two goods, gold and cotton, the proceeds of
which it uses to purchase other goods and services from
neighbouring islands through its banks. Assuming that all other
required institutions in an economy are prevalent in this island,
discuss the circular flow of income and spending in Dominion
Island. No diagram is required.
Consider an industry with 21 producers that has the following market share:
Consider an industry with 21 producers that has the following market share:
one producer: 18%
two producers: 12% each
six producers: 5% each
eight producers: 3% each
four producers: 1% each
The second and third largest producers are wanting to merge.
Calculate the four-firm concentration ratio and the Herfindahl-Hirshman Index for this industry, both before and after the proposed merger.
QUESTION TWO (20 Marks) Consider the hypothetical example of Dominion Island that has firms producing only...
QUESTION TWO
Consider the hypothetical example of Dominion Island that has firms
producing only two goods, gold and cotton, the proceeds of which it
uses to purchase other goods and services from neighbouring islands
through its banks. Assuming that all other required institutions in
an economy are prevalent in this island, discuss the circular flow
of income and spending in Dominion Island. No diagram is
required
consider the hypothetical example of dominion island that has firms producing only two goods,textiles and sugar,the...
consider the hypothetical example of dominion island that has
firms producing only two goods,textiles and sugar,the proceeds of
which it used to purchase other goods and services from other
countries through its bank .Assuming that all other required
institutions in an economy are prevalent in this island,discuss the
circular flow of income and spending in dominion island.
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