In Lumberville,the Lumberjack Cuts Trees and Sells Them to the Local

question 13

Multiple Choice

In Lumberville,the lumberjack cuts trees and sells them to the local mill for $500.The local mill processes these trees into wood planks and sells them to the carpenter for $800.Finally,the carpenter uses these wood planks to make tables which he sells for $1400 to Lumberville's residents.If we allowed double counting,the total value of Lumberville's output would be calculated as ________.But if we correctly compute the total value added,the value of the total output in Lumberville would be ________.

• A)$1400; $1400
• B)$2200; $2700
• C)$2200; $4200
• D)$2700; $1400
• E)$4200; $2700

---

Definitions:

Destination Contract

A contract specifying that the seller will bear the risk and the cost of delivering goods to a specific location.

Shipment Contract

A contractual agreement where the seller is obligated to transport goods to a specific destination, with risk passing to the buyer when the goods are delivered to the carrier.

F.O.B. Hilltop Farm

A shipping term indicating that the buyer assumes responsibility for the goods once they are shipped from Hilltop Farm.

Intrastate Trucking Company

A company that operates trucks only within the boundaries of a single state, not crossing any state lines.