Question
Economics. Please answer in detail. Thank you!
How much do the following activities collectively contribute to the gross domestic product (GDP)? A mining company starts from scratch and produces iron ore valued at SI000. The mining company then sells the iron ore to different firm that produces steel valued at S1500. Finally, the steel producer sells the steel to metal fabricator who transforms the steel into folding chairs valued at $1800. A 30- year old house is sold to young family in 2013 for S150,000.The family pays the real estate agent a 5 percent commission. What is the contribution of this transaction to GDP for 2013?
Explanation / Answer
A) GDP = $1800
1st producer cost = 1000
2nd producer additional cost = 500
3rd producer additional cost = 300
total comes out to be 1800
B) GDP = $157500
150000+150000*5%
=157500