Question

Consider the table. Mother Nature Tlaloc Bob Value of sales ($) 2750 7750 20000 Dirt ($) 0 2750 0 Bricks ($) 0 0 7750 Wages ($) 1000 3700 10000 Interest payments ($) 1000 600 900 Rent ($) 500 300 700 Profits ($) 250 400 650 Total expenditure ($) 2750 7750 20000 Mother Nature produces dirt, Tlaloc turns the dirt into brick, and Bob creates brick houses. The economy is characterized by the table. Note all figures are measured in dollars. What is the value added for Mother Nature? $ What is the value added for Tlaloc? $ What is the value added for Bob?

Answer 1

Answer and Explanation:

The computation is shown below:

1. For value-added for mother nature

It would be equivalent to the value of sales i.e. $2,750

2. For value-added for tlaloc

It would be

= $7,750 - $2,750

= $5,000

3. And, for value-added for Bob

It would be

= $20,000 - $7,750

= $12,250

The same is to be considered for all three