Question

Farmer bill grows wheat and sells it to the miller for $50,000. the miller turns it into flour and sells it to the bakery for $75,000. the bakery uses the flour in the bread that it sells to people for $90,000. the total contribution to gross domestic product (gdp) is:

Answer 1

The total contribution to GDP in the given scenario is $90,000, which is the sum of the values added by the farmer, miller, and bakery at each respective stage of production.

Step-by-step explanation:

The total contribution to gross domestic product (GDP) is calculated by considering the value added at each stage of production. Farmer Bill sells wheat to the miller for $50,000, the miller sells flour to the bakery for $75,000, and the bakery sells bread for $90,000. To avoid double counting, we consider the value added at each stage: the miller added $25,000 (${75,000 - $50,000}) and the bakery added $15,000 (${90,000 - $75,000}). Therefore, the total contribution to GDP is the sum of these values: ${50,000 + $25,000 + $15,000}, which equals ${90,000}.

Answer 2

The total value added to in production of wheat and the cost of turning the wheat to flour is what is used to calculate the total contribution to the GDP. The total value of $90,000 is also equal to market value of the product that is produced which would be the bread.