Calculating GDP in the Shirt Economy using the Expenditure Approach

Calculating GDP in the Shirt Economy using the Value Added Approach

In a simple economy, a farmer sells wheat to a miller for $20. The miller grinds the wheat into flour and sells it to a baker for $35. The baker uses the flour to make bread, which is then sold to a consumer for $50. Based on this information, what is the total value contributed to the economy by this entire production process?

Analyzing Value Added in a Production Chain

In a simplified economy, a cotton farmer sells raw cotton to a textile mill for $50. The mill processes the cotton into cloth and sells it to a shirt factory for $80. The factory then manufactures a shirt and sells it to a final consumer for $100. Match each production stage with the value it added to the economy.

Identifying Errors in Economic Calculation