Consider an economy which produces and sells, among a host of other things, 100 million T-shirts a year. The average T-shirt begins life when a farmer plants seeds she put away last year, waters them, harvests the cotton, then sells the cotton to a mill for $0.75, which sells the fabric to a T-shirt factory for $1.50, which sells the T-shirt to a wholesaler for $5, who sell it to Nordstrom for $10, which finally sells it to you for $17. Calculate the income earned for each firm involved in the production of T-shirts. Then, calculate the total income contribution from T-shirt production to GDP.
Consider an economy which produces and sells, among a host of other things, 100 million T-shirts a year. The average T-shirt begins life when a farmer plants seeds she put away last year, waters them, harvests the cotton, then sells the cotton to a mill for $0.75, which sells the fabric to a T-shirt factory for $1.50, which sells the T-shirt to a wholesaler for $5, who sell it to Nordstrom for $10, which finally sells it to you for $17. Calculate the income earned for each firm involved in the production of T-shirts. Then, calculate the total income contribution from T-shirt production to GDP.
Chapter2: Scarcity And Opportunity Costs
Section: Chapter Questions
Problem 14E
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Consider an economy which produces and sells, among a host of other things, 100 million T-shirts a year. The average T-shirt begins life when a farmer plants seeds she put away last year, waters them, harvests the cotton, then sells the cotton to a mill for $0.75, which sells the fabric to a T-shirt factory for $1.50, which sells the T-shirt to a wholesaler for $5, who sell it to Nordstrom for $10, which finally sells it to you for $17. Calculate the income earned for each firm involved in the production of T-shirts. Then, calculate the total income contribution from T-shirt production to GDP .
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