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Study the data below for a group of firms that make up the sausage economy. These firms split their value added entirely between wages and
Study the data below for a group of firms that make up the sausage economy. These firms split their value added entirely between wages and profit (which is paid as dividends to shareholders). Complete the table (4 points). Then compute GDP by all three methods discussed in class (8 points). Clearly indicate which method you are using in each case. Note there are no other firms in the sausage economy nor a government, everything produced is sold (and there are no typos in the table!) The Sausage Economy Worker/good Intermediate Wages Profit Value added Sales goods Farmer/meat $0 $4 $14 Sausage factory/Sausage $4 $20 Gourmet Restaurant/Meal $16 $10 $35 $12 Further information: $2 worth of the sausages are exported and $5 of tractors are imported by the farmer. There are no other exports or imports
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