Economics 305 Dr. Neri Spring 2011 Problem Set No. 1 due at the beginning of lecture on Thursday February 10. E-mail submissions will not be accepted. Late submissions will have points deducted. Please put you name IN INK on the top of all papers submitted. 1. Consider Macronesia, a country with three companies: Macrosoft, CardboardCo, and BoardCo. Macrosoft makes Monopoly board games using boards and cards as its intermediate goods. CardboardCo makes cardboard. BoardCo makes boards and cards using cardboard. Their respective income statements showing revenues, expenses and profit are below (there is no interest and rent expense): CardboardCo BoardCo MacroSoft Revenues $10 Revenues $30 Revenues $60 Expenses: Wages $5 Expenses: Wages $12 Expenses: Wages $20 Cardboard $10 Board and Cards $30 Profit $5 Profit $8 Profit $10 Compute GDP using three approaches: Expenditure, Income and Value Added. 2.
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