Question

PRODUCTION APPROACH In order to find GDP using the production approach, add together all of the value added amounts. Scenario 1: A farmer harvests a crop of wheatThe value he adds to the product is $5,500, a miller turns the wheat into flour. The value he adds to the product is $585, a baker turns the flour into bread. The value he adds to the product is $ 8 and a grocer packages and markets the bread. The value he adds to the product is $100 . Scenario 2: A farmer harvests a crop of wheatThe value he adds to the product is $10,300, a miller turns the wheat into flour. The value he adds to the product is $1,100, a baker turns the flour into bread. The value he adds to the product is $355 and a grocer packages and markets the bread. The value he adds to the product is $808. Scenario 3: A farmer harvests a crop of wheat. The value he adds to the product is $22,400, a miller turns the wheat into flour. The value he adds to the product is $1,862, a baker turns the flour into bread. The value he adds to the product is $1,820 and a grocer packages and markets the bread. The value he adds to the product is $57. Scenario 4: A farmer harvests a crop of wheat. The value he adds to the product is $26,900, a miller turns the wheat into flourThe value he adds to the product is $280, a baker turns the flour into bread. The value he adds to the product is $1,900 and a grocer packages and markets the bread. The value he adds to the product is $302 Scenario 5: A farmer harvests a crop of wheatThe value he adds to the product is $2,000, a miller turns the wheat into flour. The value he adds to the product is $2,015, a baker turns the flour into breadThe value he adds to the product is $155 and a grocer packages and markets the bread. The value he adds to the product is $22

Answer 1

Using the production approach, GDP for each scenario is calculated by adding the value added at each stage: $6,193, $12,563, $26,139, $29,382, and $4,192, respectively.

To find the GDP using the production approach, add together all the value-added amounts in each scenario:

1. Scenario 1:

- Farmer: $5,500

- Miller: $585

- Baker: $8

- Grocer: $100

Total GDP = $5,500 + $585 + $8 + $100 = $6,193

2. Scenario 2:

- Farmer: $10,300

- Miller: $1,100

- Baker: $355

- Grocer: $808

Total GDP = $10,300 + $1,100 + $355 + $808 = $12,563

3. Scenario 3:

- Farmer: $22,400

- Miller: $1,862

- Baker: $1,820

- Grocer: $57

Total GDP = $22,400 + $1,862 + $1,820 + $57 = $26,139

4. Scenario 4:

- Farmer: $26,900

- Miller: $280

- Baker: $1,900

- Grocer: $302

Total GDP = $26,900 + $280 + $1,900 + $302 = $29,382

5. Scenario 5:

- Farmer: $2,000

- Miller: $2,015

- Baker: $155

- Grocer: $22

Total GDP = $2,000 + $2,015 + $155 + $22 = $4,192

These are the GDP values for each scenario calculated using the production approach by summing up the value added at each stage of production.