Question

Mary bought a CD by Hootie and the Blowfish 20 years ago for $15. This year she sells it on ebay for $10 plus $5 shipping to a buyer in California. Ebay receives $1 of the $10 price for its services in facilitating the transaction. What is the contribution to this year's GDP?

a.$10
b. $6
c. $0, because this was a used good
d. $1
e. $15

Answer 1

The contribution to this year's GDP from the sale of Mary's used CD on eBay is $1, which is the service fee eBay earned for facilitating the transaction.

Step-by-step explanation:

The contribution to this year's GDP from the sale of Mary's CD is the amount that pertains to the current period's production of goods and services. Since the CD is a used good, its resale does not count towards the current GDP. However, the service fee that eBay charges for facilitating the transaction does contribute to the GDP. Therefore, the correct answer is d. $1, as it is the value of the service provided by eBay in the current year.