Question

Exercise 3. A simple economy. Consider an economy with three domestic agents: Ann, Bill and Carl. And a foreign economy with a representative agent Fer.

• Ann owns land and uses the trees in their yard for wood. She cuts down the trees and sells the wood.

• Bill owns a firm that buys wood and build and sell tables.

• Carl is a retired agent that has some wealth.

• There is no government.

• During the year the following transactions happen:

o Ann sold 700 pounds of wood at price $10/pound. The other 300 pounds are kept as inventory of the firm.

o Bill bought 500 pounds of wood, produced and sold 100 tables at price $500/table.

o Fer bought 30 tables from Bill and 200 pounds of wood from Ann.
o The domestic agents (A, B & C) bought 70 tables from the firm owned by Bill.
o Bill’s capital depreciated by $1000.

Calculate GDP for this economy and do the income decomposition (Wages, Taxes, Net Profits, Depreciation).

Answer 1

Sallion: G.ven'.lke det,:)タof einntr껑 "The thre donethe agent, are ·hm, a:n, and art →to eign economy-agent Fer Ann Sold ponds of wood at price 01pond 12 hven uah tables at Poe 。/table. c agen 'firm owned b Gill. Gop caloula-tion

2 Cost ot sooKlo Selling loo ale at p t ssro Mate %50 000 Valued added bu Bill soooo-so o oos lo ニ.gsu000. in , Depreciason looo