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Stan has a summer beach cottage that he has owned for many years. The cottage is valued at $ 125 comma 000. This​ year, Stan spends ​$250 on paint and ​$600 on​ trees, and then paints the exterior of the cottage and plants the trees himself. If he had hired a professional​ painter, it would have cost ​$1 comma 000 to paint the cottage​ (not including the cost of​ paint), and if he had hired a professional​ landscaper, it would have cost ​$450 ​(not including the cost of the​ trees) to do the planting. How much does Stan​'s improvements to the cottage add to GDP this​ year?

User Halcyon
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1 Answer

3 votes

Answer:

Case 1. $850

Case 2. $2.300

Step-by-step explanation:

  • Improvement in cottage would cost (250 + 600) = 850. So, increase in GDP is 850.
  • If he actually hired the painter total cost would be (1.000 + 250 + 450 + 600) = 2.300. So, increase in GDP is 2.300
User Waleed Asender
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