Intelligence incorporated produces 100 computer chips and sells them for $200 each to bell computers. Using the chips and other labor and materials, bell produces 100 personal computers. Bell sells the computers, bundled with software that bell licenses from macrosoft at $50 per computer, to pc charlie’s for $800 each. Pc charlie’s sells the computers to the public for $1,000 each. Calculate the total contribution to gdp using the value-added method.

Respuesta :

The value added for each agent in the economy is as follows

Intelligence incorporated: 100 x 200 = 20,000

Bell: 800*100 - 20,000 - 50 x 100 = 55,000

PC Charlie's: 1000 x 100 - 800 x 100 = 20,000

GDP = 20,000 + 55,000 + 20,000 = $95,000

What is the value-added method?

  • Total value added is determined in business by tabulating the unit value added for each sold unit of a product. Thus, revenue less intermediary consumption equals the total value added.
  • Total value added is very closely approximated by employee compensation, which represents a return to labor, plus earnings before taxes, which represents a return to capital.
  • Value added is a higher percentage of revenue for integrated companies and a lower percentage of revenue for less integrated companies.
  • The word "value added" in economics, and more especially macroeconomics, refers to the contribution made by the factors of production to improve the product's value and the income of people who own those factors.
  • As a result, both labor and capital contribute to the national value added.

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