There are three firms in an economy: X, Y, and Z. Firm X buys $200 worth of goods from firm Y and $300 worth goods from firm Z; and produces 250 units of output at $4 per unit. Firm Y buys $150 worth goods from firm X, and $250 worth goods form firm Z; and produces 300 units of output at $6 per unit. Firm Z buys $75 worth goods from X, and $50 worth goods from firm Y; and produces 500 units at $2 per unit. Given this information, what is the economy's GDP?

Respuesta :

Answer: $2,775

Explanation:

Total Value of goods sold by X:

= X sells to Y + X sells to Z

= $150 + $75

= $225

Total Value of goods sold by Y:

= Y sells to X + Y sells to Z

= $200 + $50

= $250

Total Value of goods sold by Z:

= Z sells to X + Z sells to Y

= $300 + $250

= $550

Value of goods produced by X = units of output × cost per unit

                                                    = 250 units ×  $4

                                                    = $1,000

Value of goods produced by Y = units of output × cost per unit

                                                    = 300 units ×  $6

                                                    = $1,800

Value of goods produced by Z = units of output × cost per unit

                                                    = 500 units ×  $2

                                                    = $1,000

GDP using the value added approach:

= [Goods produced by X - VA by X] + [Goods produced by Y - VA by Y] + [Goods produced by Z - VA by Z]

= [$1,000 - $225] + [$1,800 - $250] + [$1,000 - $550]

= $775 + $1,550 + $450

= $2,775

Based on the calculation below, the GDP of the economy is $2,775.

How to calculate the GDP of an economy

The GDP of the economy can be calculated using the value-added approach as follows:

Value of X output = Units produced by X * Cost per unit of X = 250 * $4 = $1,000

Value of Y output = Units produced by Y * Cost per unit of Y = 300 * $6 = $1,800

Value of Z output = Units produced by Z * Cost per unit of Z = 500 * $2 = $1,000

Value of X sales = Sales to Y by X + Sales to Z by X = $150 + $75 = $225

Value of Y sales = Sales to X by Y + Sales to Z by Y = $200 + $50 = $250

Value of Z sales = Sales to X by Z + Sales to Y by Z = $300 + $250 = $550

Therefore, we have:

GDP of the economy = (Value of X output - Value of X sales) + (Value of Y output - Value of Y sales) + (Value of Z output - Value of Z sales) = ($1,000 - $225) + ($1,800 - $250) + ($1,000 - $550) = $2,775

Learn more about GDP here: https://brainly.com/question/15682765.

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