Assume an economy with two firms: a coffee beans producer and a coffee shop. In a given
Question:
Assume an economy with two firms: a coffee beans producer and a coffee shop. In a given year, a coffee beans producer grows 10,000 tonnes of coffee beans, sells 5,000 tonnes of coffee beans to the local coffee shop at $50 per tonne, exports 3,500 tonnes of coffee beans at $50 per tonne, and stores 1,500 tonnes as inventory. The coffee producer pays $100,000 in wages to consumers. The coffee shop produces 100,000 cups of coffee and sells all of it to domestic consumers at $4 a coffee. The coffee shop pays consumers $40,000 in wages. In addition to the 100,000 coffees consumers buy from the local coffee shop, they (consumers) import and consume 30,000 cups of coffee (coffee pods), and they pay $2 per a coffee pod. Calculate gross domestic product using:
a) the product approach,
b) the expenditure approach
c) the income approach
d) why the results of three calculations are different or same? Please give an explanation on that