Question

You bought a popular video game last year for $75 and sold it to a store this year for $20. The store sells the used game to a consumer for $50. This adds _____ to GDP when the store sells the game to the consumer.

Answer 1

The resale of the used video game adds the retailer's gross margin to GDP, which is the difference between the selling price to the consumer ($50) and the purchase price from the original owner ($20), resulting in a $30 contribution to the GDP.

Step-by-step explanation:

When the store sells the used game to a consumer for $50, it adds $50 to the Gross Domestic Product (GDP). This is because GDP measures the value of final goods and services produced and sold within a country during a specific period. Used products are not typically included in GDP calculations. However, the transaction contributes to GDP to the extent that there is a value-add in the form of a service – in this case, the retailer's service of distributing and selling the game. Therefore, the store's service, which amounts to the resale gross margin ($50 - $20 = $30), is what factually contributes to the GDP increase.

Answer 2

$30

Step-by-step explanation:

Data provided in the question

Purchase price of a popular video game purchased last year is $75

Now the selling price of a popular video game to the store this year is $20

And, the Selling price i.e charged by the store to the customer is $50

Based on the above information, the added amount to GDP is

= Selling price i.e charged by the store to the customer - selling price of a popular video game to the store this year

= $50 - $20

= $30

GDP refers to the finalized value of goods and services that are to be produced within the country.