The small economy of Pizzania produces three goods (bread,cheese, and pizza), each

Chapter 3, Problem 4

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The small economy of Pizzania produces three goods (bread,cheese, and pizza), each produced by a separate company. Thebread and cheese companies produce all the inputs they needto make bread and cheese, respectively. The pizza companyuses the bread and cheese from the other companies to makeits pizzas. All three companies employ labor to help producetheir goods, and the difference between the value of goods soldand the sum of labor and input costs is the firms profit. Theaccompanying table summarizes the activities of the threecompanies when all the bread and cheese produced are sold tothe pizza company as inputs in the production of pizzas.a. Calculate GDP as the value added in production.b.Calculate GDP as spending on final goods and services.c. Calculate GDP as factor income.