One bag of oranges is sold for $6.00 to a company that turns them into juice which is sold to consumers for $12.00. Another bag of oranges is purchased by a grocery store for $6.00 who then sells it to a consumer for $7. Taking these four transactions into account, how much is added to GDP?

Question

Business

Precious Riddle

6 March, 23:34

One bag of oranges is sold for $6.00 to a company that turns them into juice which is sold to consumers for $12.00. Another bag of oranges is purchased by a grocery store for $6.00 who then sells it to a consumer for $7. Taking these four transactions into account, how much is added to GDP?

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Reilly Lewis · Answer 1

19 is added to the gdp

Explanation:

6 (bag of oranges) + 6 (bag of oranges) + (12-6) (juice) + (7-6) (bag of oranges) = 19 is added to the gdp

In this case I'm using the income approach to calculate GDP, which includes the income earned by wages to labor (not present), rent by land (you may say that the original bag of oranges), the return on capital (interest, not present), and entrepreneur's profits (juice and grocery store)