Assume an economy with two firms: a coffee beans producer and a coffee shop. In a given year, a coffee beans producer grows 75,000 tonnes of coffee beans, sells 50,000 tonnes of coffee beans to the local coffee shop at $50 per tonne, exports 20,000 tonnes of coffee beans at $50 per tonne, and stores 5,000 tonnes as inventory. The coffee producer pays $100,000 in wages to consumers. The coffee shop produces 1,000,000 cups of coffee and sells all of it to domestic consumers at $4 a coffee. The coffee shop pays consumers $400,000 in wages. In addition to the 1,000,000 coffees consumers buy from the local coffee shop, they (consumers) import and consume 300,000 cups of coffee (coffee pods), and they pay $2 per a coffee pod. Calculate gross domestic product using • the product approach, • the expenditure approach, and • the income approach.
Assume an economy with two firms: a coffee beans producer and a coffee
shop. In a given year, a coffee beans producer grows 75,000 tonnes of coffee beans, sells 50,000
tonnes of coffee beans to the local coffee shop at $50 per tonne, exports 20,000 tonnes of coffee
beans at $50 per tonne, and stores 5,000 tonnes as inventory. The coffee producer pays $100,000
in wages to consumers. The coffee shop produces 1,000,000 cups of coffee and sells all of it to
domestic consumers at $4 a coffee. The coffee shop pays consumers $400,000 in wages. In
addition to the 1,000,000 coffees consumers buy from the local coffee shop, they (consumers)
import and consume 300,000 cups of coffee (coffee pods), and they pay $2 per a coffee pod.
Calculate gross domestic product using
• the product approach,
• the expenditure approach, and
• the income approach.
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