Question

1. A Chinese restaurant buys 100 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40. They create 50 meals with these ingredients and sell each one for $5.18. How much does this process contribute to GDP? Round to two decimals.

2. Suppose we want to determine whether the average person is better off in Country A or Country B. It would be best to focus on:

Group of answer choices

the amount the average person saves per month

average income per person

average consumption per person

government spending per person

Answer 1

1.

GDP is the total values of final goods and services produced within the economy during a given year.

GDP only includes value of final goods and not in the intermediate goods.

Intermediate goods are those goods which are use for further production or for resale in a given year.

Final goods are the goods which are use by final consumer for consumption.

Intermediate goods	Final goods
100 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40	50 meals with these ingredients and sell each one for $5.18

GDP= Value of 50 meals= 50 x $5.18= $259

This process contribute $259 to GDP