Consider a typical worker, an unemployed worker who got divorced and had heart-bypass surgery in the same year, and a blissful retiree. The typical worker produces about $110,000 worth of output each year. The litigation costs for a “lightly conflicted” divorce run about $50,000, and the health-care costs for heart-bypass surgery are about $100,000. The retiree could go back to work and earn a $115,000 annual salary, but she chooses to work in her garden and perform volunteer work instead.

a. Which of these people causes GDP to go up by the largest amount?

b. Which of these people do you think is the happiest?

c. What is the blissful retiree’s contribution to GDP?