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Harwell Township has two corporations, and a family-owned business, Fiona's Farm. Carl's Conveyors manufactures and sells five supermarket conveyor systems for $2000 each. Two of them are sold to Wally's Mart and three of them are sold to a store in Slater City, which is outside the township. Fiona's farm produces 100 bushels of corn which it sells for $50 each to Wally's Mart. Wally's Mart sells 100 bushels of corn to domestic consumers for $100 each. Carl's and Fiona's do not use any inputs and there is no statistical discrepancy. The businesses make the following payments: $5,500 $1,000 Carl's Wally's Fiona's $1,000 $500 $2,000 Wages Interest $1,000 $600 Rent $500 Sales Taxes All the payments are made to Harwell residents, except the interest payments which are

Harwell Township has two corporations, and a family-owned business, Fiona's Farm. Carl's Conveyors manufactures and sells five supermarket conveyor systems for $2000 each. Two of them are sold to Wally's Mart and three of them are sold to a store in Slater City, which is outside the township. Fiona's farm produces 100 bushels of corn which it sells for $50 each to Wally's Mart. Wally's Mart sells 100 bushels of corn to domestic consumers for $100 each. Carl's and Fiona's do not use any inputs and there is no statistical discrepancy. The businesses make the following payments: $5,500 $1,000 Carl's Wally's Fiona's $1,000 $500 $2,000 Wages Interest $1,000 $600 Rent $500 Sales Taxes All the payments are made to Harwell residents, except the interest payments which are

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
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Harwell Township has two corporations, Carl's Conveyor Corp. and Wally's Mart, Inc., and a family-owned business, Fiona's Farm. Carl's Conveyors manufactures and sells five supermarket conveyor systems for $2000 each. Two of them are sold to Wally's Mart and three of them are sold to a store in Slater City, which is outside the township. Fiona's farm produces 100 bushels of corn which it sells for $50 each to Wally's Mart. Wally's Mart sells 100 bushels of corn to domestic consumers for $100 each. Carl's and Fiona's do not use any inputs and there is no statistical discrepancy. The businesses make the following payments: Carl's Wally's Fiona's $1,000 $2,000 Wages Interest $5,500 $1,000 $500 $500 $1,000 $600 Rent Sales Taxes All the payments are made to Harwell residents, except the interest payments which are sent to the bank in Slater City. Carl's and Wally's report depreciation of $1000 and $400, respectively, to their shareholders, who are all Harwell residents. a. Use the income approach to calculate Harwell Township's National Income, GNP and GDP. b. Use the expenditure approach to calculate Harwell Township's GDP and its compo- nents. c. Use the value-added approach to calculate Harwell Township's GDP.
Transcribed Image Text:Harwell Township has two corporations, Carl's Conveyor Corp. and Wally's Mart, Inc., and a family-owned business, Fiona's Farm. Carl's Conveyors manufactures and sells five supermarket conveyor systems for $2000 each. Two of them are sold to Wally's Mart and three of them are sold to a store in Slater City, which is outside the township. Fiona's farm produces 100 bushels of corn which it sells for $50 each to Wally's Mart. Wally's Mart sells 100 bushels of corn to domestic consumers for $100 each. Carl's and Fiona's do not use any inputs and there is no statistical discrepancy. The businesses make the following payments: Carl's Wally's Fiona's $1,000 $2,000 Wages Interest $5,500 $1,000 $500 $500 $1,000 $600 Rent Sales Taxes All the payments are made to Harwell residents, except the interest payments which are sent to the bank in Slater City. Carl's and Wally's report depreciation of $1000 and $400, respectively, to their shareholders, who are all Harwell residents. a. Use the income approach to calculate Harwell Township's National Income, GNP and GDP. b. Use the expenditure approach to calculate Harwell Township's GDP and its compo- nents. c. Use the value-added approach to calculate Harwell Township's GDP.
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