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1. Suppose you own a small skateboard factory with the following sales, expenses, and profits expressed in rupees:

\begin{tabular}{ll}
Total sales & 86000 \\
Expenses & \\
Wages and salaries & 24000 \\
Interest on loans & 2000 \\
Rent & 8000 \\
Raw materials & 16000 \\
Tools and equipment & 30000 \\
Profits & 6000 \\
\end{tabular}

What is the value added to GDP by the productive activities of your firm?



Answer :

GinnyAnswer
To find the value added to GDP by your skateboard factory, you need to follow a few steps.

First, let's verify the total expenses of the factory. The expenses include:

- Wages and salaries: 24,000 rupees
- Interest on loans: 2,000 rupees
- Rent: 8,000 rupees
- Raw materials: 16,000 rupees
- Tools and equipment: 30,000 rupees

To find the total expenses, sum up these individual expenses:

[tex]\[ \text{Total Expenses} = 24,000 + 2,000 + 8,000 + 16,000 + 30,000 = 80,000 \text{ rupees} \][/tex]

Next, we need to identify the components that contribute to the value added to GDP. Value added to GDP is calculated by summing up the profits, wages, salaries, interest on loans, and rent:

- Profits: 6,000 rupees
- Wages and salaries: 24,000 rupees
- Interest on loans: 2,000 rupees
- Rent: 8,000 rupees

To find the value added to GDP, we sum these components:

[tex]\[ \text{Value Added to GDP} = 6,000 + 24,000 + 2,000 + 8,000 = 40,000 \text{ rupees} \][/tex]

So, the total expenses are 80,000 rupees, and the value added to GDP by the productive activities of your factory is 40,000 rupees.

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