farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is the valued added by each person? b. Should the pumpkins be included in GDP? Explain your answer. c. Why does GDP not include in goods that are resold?

farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is the valued added by each person? b. Should the pumpkins be included in GDP? Explain your answer. c. Why does GDP not include in goods that are resold?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter10: Financing And Producing Goods

Section10.3: The Production Process

Problem 5R

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