Question

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 $35000. 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.

Answer 1

a.- 35,000

b.- 7,000

c.- 13,000

d.- 15,000

e.- true 7,000 + 13,000 + 15,000 = 35,000

Step-by-step explanation:

Gross Domestic Product (GDP) measures the dollar value of all item produced by the country plus his commercial balance over a period of one-year.

The GDP will increase by 35,000 as counting each state will induce in counting three times the same engive, and two times the value added of the body shop.

value added: the current value less the one of the previous stage

machinic sales it 7,000 from 0 so added 7,000

then the body shop sale it 20,000 from 7,000 added 13,000

the dealear sale it for 35,000 from 20,000 added 15,000