A mechanic builds an engine and then sells it to a customized body shop for $7,000. The body shop inserts the engine into the car and resells it to a dealer for $20,000. The dealer then sells the finished vehicle for $35,000.
a. When the consumer drives off with the car, GDP increases by $ .
b. What is the value added by the mechanic? (Assume that the value of the materials used to build it is zero.) $
c. What is the value added by the body shop? $
d. What is the value added by the dealer? $
e. The total value added is the amount that GDP increased.
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