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Unformatted text preview: , the hamburger is a final good. You are the final user;
no one uses (eats) the hamburger other
An intermediate good, in contrast, has
not reached its final user. For example, consider the bun that the restaurant buys and
on which the hamburger is placed. The bun
is an intermediate good at this stage,
because it is not yet in the hands of the final
user (the person who buys the hamburger).
It is in the hands of the people who run the
restaurant, who use the bun, along with
other goods (lettuce, mustard, hamburger
meat), to produce a hamburger for sale.
When computing GDP, economists count
only final goods and services. If they
counted both final and intermediate goods
and services, they would be double counting, or counting a good more than once. at $100 each
equals $1,000 In our tiny example economy, the
only goods produced
are computers, cars,
and watches. To calculate the GDP, we
multiply the quantity
of each good by its
price, then sum the
dollar amounts. Suppose that a book is a final good and
that paper and ink are intermediate...
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This document was uploaded on 01/16/2014.
- Winter '14