Assume a Simple Economy with No Government and No Foreign

question 148

Essay

Assume a simple economy with no government and no foreign trade.The firm produces 100 units of output,sells 80 to consumers for a price of $1,and adds the remaining 20 to its inventory at a price of $0.75.Each unit costs $0.75 to produce,which is equal to the labor cost.There are no other costs associated with production.
(A)Name three ways you could measure GDP from these data.
(B)Show how you would perform each calculation.

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Definitions:

Gross Income

The total income earned before any deductions or taxes are applied.

Standard Deduction

The fixed amount the IRS allows taxpayers to subtract from their taxable income if they do not itemize deductions, differing by filing status.

Exemption

A provision that reduces or eliminates a taxpayer's obligation to pay tax, typically based on certain conditions or qualifications.

Tax Bill

A statement from a government authority specifying the amount of tax owed by an individual or entity.