Consider the table Mother Nature TlalocBob Value of sales (S) Dirt ($) Bricks ($
ID: 2820636 • Letter: C
Question
Consider the table Mother Nature TlalocBob Value of sales (S) Dirt ($) Bricks ($) Wages ($) Interest payments ($) Rent (S) Profits ($) Total expenditure (S) 2950 0 0 1000 1000 700 250 2950 775019950 2950 0 7750 3700 10000 900 650 650 775019950 0 600 100 400 Mother Nature produces dirt, Tlaloc turns the dirt into brick, and Bob creates brick houses. The economy is characterized by the table. Note all figures are measured in dollars What is the value added for Mother Nature? What is the value added for Tlaloc? What is the value added for Bob?Explanation / Answer
1. MotherNature produces dirt. it has produced $ 2,950 worth of dirt that is in-turn purchased by Tlaloc to make bricks. That's how the value of sales of Mother Nature equals the dirt expense of Tlaloc.
Hence Value added for MotherNature in this process of economic chain is $ 2,950
2. Tlaloc purchased dirt of $ 2,950 value and produced brick worth $ 7,750 which is in-turn purchased by Bob to build brick houses. That's how the Value of sales of Tlaloc equals the Brick expense of Bob.
Thus, as Tlaloc manufactured $ 7,750 worth from $2,950 worth dirt, Value added for Tlaloc in this process is = $ 7,750 - $ 2,950 = $ 4,800
3. Bob uses $ 7,750 worth of brick and creates brick houses whose sales proceedings is $ 19,950. Thus Value added to Bob by converting $ 7,750 worth of brick to $19,950 worth of brick houses
= $ 19,950 - $ 7,750 = $12,200