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Question #48796
A farmer grows a bushel of wheat and sells it to a miller for $1,the miller turns the wheat into floar and sells it to a baker for 3$.
The baker uses the floar to make a floar and sells it to consumer for 6$. FIND 1.Value added in each stage of production? 2.GDP? NOTE; The value of the finished goods already includes the value of the intermediate goods.So, including intermediate goods in GDP would be 'double counting' Expert's answer 1.The value added in 1 stage of production is$1, in 2 stage is 3 - 1 = 2$, in 3 stage 6 - 3 =$3.
2.GDP is the final value added of production during all stages, so: GDP = 1 + 2 + 3 = \$6.

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