Scenario 4.1 CANOES-R-US Makes Canoes.It Buys the Shell of the Canoe from Canoe

question 270

Multiple Choice

Scenario 4.1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labour and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 4.1.The value added of CANOES-R-US for each canoe equals

• A)$1,200.
• B)$800.
• C)$500.
• D)$400.
• E)$300.

---

Definitions:

Price Ceilings

Regulatory limits set on the price that can be charged for certain goods or services, intended to protect consumers from excessive rates.

Price Floors

A minimum price, set by law or agreement, below which a commodity cannot legally be sold, often used in agriculture to stabilize market prices.

Taxes

Compulsory financial charges imposed by a government on individuals, businesses, or transactions to fund public spending.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, engaged in professional, commercial, or industrial activities.