A mechanic builds an engine and then sells it to a customized body shop for $7,000. The

Question:

A mechanic builds an engine and then sells it to a customized body shop for $7,000. The body shop installs the engine in a car and sells the car to a dealer for $20,000. The dealer then sells the finished vehicle for $35,000. A consumer drives off with the car. By how much does GDP increase? What is the value added at each step of the production process? How does the total value added compare with the amount by which GDP increased?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles Of Economics

ISBN: 9780393623819

2nd Edition

Authors: Lee Coppock, Dirk Mateer

Question Posted: