A farmer sells $50,000 worth of apples to individuals who take them home to eat, $75,000 worth to a company that uses them all to produce apple juice, and $100,000 worth of apples to a grocery store that sells all of them to households. How much of the farmer's sales will be included as apples in GDP?

Question

Business

America Keller

9 August, 18:23

A farmer sells $50,000 worth of apples to individuals who take them home to eat, $75,000 worth to a company that uses them all to produce apple juice, and $100,000 worth of apples to a grocery store that sells all of them to households. How much of the farmer's sales will be included as apples in GDP?

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Answers (1)

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Juliette David · Answer 1

The answer is: $150,000

Explanation:

The GDP includes all the final, finished and legal products produced in the country during a year.

The apples sold directly by the farmer to individual consumers and the apples the grocery store sells to households are both going to be included in the GDP.

The only apples not included in the GDP are the once sold to the company that produces apple juice, since they are intermediate goods and not finished goods.