Answer to Question #50394 in Macroeconomics for abdulla sabit
Suppose, in an economy, there are only two firms, a potato producer and a catsup producer
and all tomatoes are used as immediate goods to produce catsup.The income
statement are shown below:
(Figure in billion $)
Tomato Producer ------ Amount($) Catsup Producer ----- Amount($)
Sales of tomato 200 Sales of tomato 500
Wages 100 Wages 150
Interest 20 Interest 30
Rent 25 Rent 40
Depreciation 10 Depreciation 10
Indirect business taxes 5 Indirect business taxes 10
a.What is the profit for firm?
b.What is the value of GNP and NNP of that economy?
c.What is the value added in each firm?
d. What is the value of national income in that economy?
a. The profit for catsup producer is: TP = 500 - 150 - 30 - 40 - 10 - 10 = $260 billion The profit for tomato producer is: TP = 200 - 100 - 20 - 25 - 10 - 5 = $40 billion b. GNP = Interest + rent + profit + wages + indirect taxes + depreciation = 500 + 200 = $700 billion NNP = GNP - depreciation = 700 - 20 = $680 billion c. The value added in each firm is 200 and 500 respectively. d. The value of national income in that economy is 500 - 200 = $300 billion.
College and University is a time in your life when you find your passions and your interests and you study…
APPROVED BY CLIENTS
Very helpful and the expert was able to answer all my questions. Explanations from the expert were very detailed and easy to understand. I definitely recommend this service and will continue to use it for all my assignment needs.