ECON 1010 Midterm: ECON 1010 1ST HALF
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3 Aug 2015
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Intermediate goods are goods and services that are purchased for resale or for further processing or manufacturing. Final goods are consumer goods, capital goods, and services that are purchased by their final users, rather than for resale or for further processing or manufacturing. Including the value of intermediate goods in the measure of real GDP would amount to multiple counting, and therefore distort the value of GDP. Value added is the market value of a firm’s output less the value of the inputs the firm has bought from others.
Using the table below, calculate the total sales values, value-added, and fill in the missing boxes. The product is assembled for sale is a fancy wool suit.
Stages of Production | Sales Value of Materials or Product | Value Added |
$0 | ||
Firm A: Sheep Ranch | $120 | |
Firm B: Wool Processor | $180 | |
Firm C: Suit Manufacturer | $220 | |
Firm D: Clothing Wholesaler | $50 | |
Firm E: Retail Clothier (Market) | $80 | |
Total Sales Value | ||
Total Value Added |