Question

A farmer grows wheat, which she sells to a miller for $90. The miller turns the wheat into flour, which she sells to a baker for $145. The baker turns the wheat into bread, which she sells to consumers for $155. Consumers eat the bread. Value added by the farmer was $___?___, value added by the miller was $__?__, and value added by the baker was $__?__. GDP in this simple economy is $ __?__ . Enter whole numbers.

Answer 1

Ans)

A farmer grows wheat, which she sells to a miller for $90. The miller turns the wheat into flour, which she sells to a baker for $145. The baker turns the wheat into bread, which she sells to consumers for $155. Consumers eat the bread.

Value added by the farmer was $90
Value added by the miller was $145-$90=$55
Value added by the baker was $155-$145=$10
GDP in this simple economy is $155
(GDP is the final value of the goods and services in the economy which are reflected as the market price of goods.)