Question

Last year, a small nation with abundant forests cut down $200 worth of trees. $100 worth of trees were then turned into $150 worth of lumber. $100 worth of that lumber was used to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in the production of trees, lumber, and bookshelves, what is this nation"s GDP? In other words, what is the value of the final goods produced including trees, lumber and bookshelves?

Answer 1

Answer:

$250

Explanation:

Given that

The cut down worth of the trees = $200

Worth of bookshelves = $250

Worth of lumber = $150

In order to find out the nation GDP, we recognize the final goods i.e book shelves price rather than the intermediate goods i.e trees and the lumber. It only deals with the market price of the goods i.e only with the bookshelves price. So only $250 is the final gods produced