Consider the Case of a Hypothetical Economy That Has No $C$

question 71

Essay

Consider the case of a hypothetical economy that has no government or foreign trade. This economy produces one final product, books. Moreover, there are only two stages of production, writing by authors and publishing by a single publishing company, Inco. In 2017, Inco produced $4 million worth of books, and consumers purchased $3 million of those books.
(A) In 2017 , far this ecanamy, haw much were $C$ and $\Gamma$ ? Haw much was GDP? In 2010 , Inca paid \$500,000 to its warkers, \$200,000 in interest to its creditars, \$300,000 for rent and $\$ 2$ millian to its authars.
(B) Haw much were Inca's profits in 2017?
(C) Haw much value added was produced by the authors in 2017? How much value added was produced by Inco? What was the total value added produced in the ecanomy that year?

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