Use the Following Data for an Ice-Cream Vendor at a Local

question 42

Essay

Use the following data for an ice-cream vendor at a local fair:
(A)Calculate the vendor's value added.
(B)Profits are revenue minus costs.Capital income consists of profits,rents,and interest.Show that the value added equals capital income plus labor income paid by the vendor.
(C)Suppose that at a similar fair,the temperature is cooler and revenues fall to $1,500,but the prices of intermediate inputs,rental fees,and wages and salaries do not change.What happens to value added and profits in this case?

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Definitions:

Consideration

The act of thinking carefully about something, especially when making decisions or forming opinions.

Commitment

A psychological state or an act of dedicating oneself to a cause, activity, or relationship, often implying a long-term engagement.

Control

The power to influence or direct people's behavior or the course of events.

Challenge

A task or situation that tests someone's abilities or endurance.