Questions based on final or intermediate goods, factor, and transfer income, domestic and national income.
Case Study 1:
Sarah opened a bakery and purchased an industrial oven. Is the cost of the industrial oven included in the calculation of national income? Explain your answer.
Answer: Yes, the cost of the industrial oven is included in the calculation of national income. It represents an investment in capital equipment, which contributes to the country’s economic output.
Case Study 2:
James bought a used bicycle to commute to work. Is the purchase of the used bicycle considered a final or intermediate good? Explain your answer.
Answer: The purchase of the used bicycle is considered a final good. It is bought for immediate personal consumption and adds to the total economic output.
Case Study 3:
Lisa received a gift of $1,000 from her grandparents on her birthday. Is this gift included in the calculation of national income? Explain your answer.
Answer: No, the gift of $1,000 is not included in the calculation of national income. It represents a transfer of money without any corresponding economic production.
Case Study 4:
John is a real estate agent who earns a commission by selling houses. Is his commission income included in the calculation of national income? Explain your answer.
Answer: Yes, John’s commission income from selling houses is included in the calculation of national income. It represents a factor payment for his services and contributes to the total economic output.
Case Study 5:
Emma, a college student, earned money by tutoring her classmates. Is her income from tutoring included in the calculation of national income? Explain your answer.
Answer: Yes, Emma’s income from tutoring is included in the calculation of national income. It represents a factor payment for her services, contributing to economic output.
Case Study 6:
A construction company purchased steel beams to build a skyscraper. Is the cost of the steel beams included in the calculation of national income? Explain your answer.
Answer: Yes, the cost of the steel beams is included in the calculation of national income. It represents an investment in capital goods for construction, contributing to economic output.
Case Study 7:
David receives a monthly pension from his former employer. Is his pension income included in the calculation of national income? Explain your answer.
Answer: Yes, David’s pension income is included in the calculation of national income. It represents a factor payment for past services rendered and contributes to economic output.
Case Study 8:
A farmer grows wheat and sells it to a flour mill. Is the sale of wheat to the flour mill considered a final or intermediate transaction? Explain your answer.
Answer: The sale of wheat to the flour mill is considered an intermediate transaction. The wheat is further processed into flour, which is the final product consumed by households.
Case Study 9:
Mary repairs and resells old furniture she buys at garage sales. Is the resale of the old furniture considered a final or intermediate transaction? Explain your answer.
Answer: The resale of the old furniture is considered a final transaction. Mary is selling the furniture in its current state for immediate personal consumption.
Case Study 10:
The government provides subsidies to farmers to support crop production. Are these subsidies included in the calculation of national income? Explain your answer.
Answer: No, the subsidies provided to farmers are not included in the calculation of national income. They represent transfer payments and do not contribute to economic output.
Case Study 11:
A software company pays royalties to a musician for using their music in a commercial advertisement. Are these royalty payments included in the calculation of national income? Explain your answer.
Answer: Yes, the royalty payments made by the software company to the musician are included in the calculation of national income. They represent a factor payment for the use of the musician’s intellectual property.
Case Study 12:
Tom, a freelance writer, earns income by writing articles for various magazines. Is his income from freelance writing included in the calculation of national income? Explain your answer.
Answer: Yes, Tom’s income from freelance writing is included in the calculation of national income. It represents a factor payment for his services and contributes to economic output.
Case Study 13:
A restaurant owner purchases fresh vegetables to use in their dishes. Are the costs of these fresh vegetables included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of fresh vegetables are included in the calculation of national income. They are considered intermediate goods used in the production of final goods (restaurant meals).
Case Study 14:
A company buys a new delivery van for its courier service. Is the purchase of the delivery van included in the calculation of national income? Explain your answer.
Answer: Yes, the purchase of the delivery van is included in the calculation of national income. It represents an investment in capital equipment, contributing to economic output.
Case Study 15:
Helen, a retired teacher, receives a monthly pension from the government. Is her pension income included in the calculation of national income? Explain your answer.
Answer: Yes, Helen’s pension income is included in the calculation of national income. It represents a factor payment for her past services and contributes to economic output.
Case Study 16:
A car manufacturer produces automobiles and sells them to a dealership. Is this sale considered a final or intermediate transaction? Explain your answer.
Answer: The sale of automobiles to the dealership is considered an intermediate transaction. The dealership will sell the cars to consumers, making that the final transaction.
Case Study 17:
A bookstore owner purchases books from a publisher for resale to customers. Are the costs of the books included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the books purchased by the bookstore owner are included in the calculation of national income. They are considered intermediate goods used in the retail process.
Case Study 18:
A professional athlete earns income through endorsements and sponsorships. Is this income included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned through endorsements and sponsorships by the professional athlete is included in the calculation of national income. It represents a factor payment for their services and endorsements, contributing to economic output.
Case Study 19:
A construction worker is paid a daily wage to build a new office building. Is the worker’s daily wage included in the calculation of national income? Explain your answer.
Answer: Yes, the worker’s daily wage is included in the calculation of national income. It represents a factor payment for their labor services, contributing to economic output.
Case Study 20:
A company produces computer chips used in the manufacturing of laptops. Is the sale of computer chips to laptop manufacturers considered a final or intermediate transaction? Explain your answer.
Answer: The sale of computer chips to laptop manufacturers is considered an intermediate transaction. The chips are used in the production of laptops, which are the final products sold to consumers.
Case Study 21:
A musician earns income by performing live concerts. Is this income included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned by the musician through live concerts is included in the calculation of national income. It represents a factor payment for their musical performances, contributing to economic output.
Case Study 22:
A factory purchases raw materials to manufacture electronic components. Are the costs of
these raw materials included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the raw materials purchased by the factory are included in the calculation of national income. They are considered intermediate goods used in the production of electronic components.
Case Study 23:
A retiree receives a monthly social security payment from the government. Is this social security payment included in the calculation of national income? Explain your answer.
Answer: No, the social security payment received by the retiree is not included in the calculation of national income. It represents a transfer payment and does not contribute to economic output.
Case Study 24:
A software developer earns income by selling licenses for their software. Is this income included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned by the software developer through the sale of software licenses is included in the calculation of national income. It represents a factor payment for their software, contributing to economic output.
Case Study 25:
A farmer grows corn and sells it to a food processing company. Is the sale of corn to the food processing company considered a final or intermediate transaction? Explain your answer.
Answer: The sale of corn to the food processing company is considered an intermediate transaction. The corn is further processed into food products, which are the final goods sold to consumers.
Case Study 26:
A painter is hired to create a mural on the side of a building. Is the payment to the painter included in the calculation of national income? Explain your answer.
Answer: Yes, the payment to the painter for creating the mural is included in the calculation of national income. It represents a factor payment for the painter’s artistic services, contributing to economic output.
Case Study 27:
A construction company purchases cement to build a bridge. Is the cost of the cement included in the calculation of national income? Explain your answer.
Answer: Yes, the cost of the cement purchased by the construction company is included in the calculation of national income. It represents an intermediate good used in construction, contributing to economic output.
Case Study 28:
A retired teacher receives a monthly pension from a private pension fund. Is this pension income included in the calculation of national income? Explain your answer.
Answer: Yes, the pension income received by the retired teacher from a private pension fund is included in the calculation of national income. It represents a factor payment for past services and contributions to economic output.
Case Study 29:
A bookstore owner rents out a section of the store to a coffee shop. Is the rental income from the coffee shop included in the calculation of national income? Explain your answer.
Answer: Yes, the rental income from the coffee shop is included in the calculation of national income. It represents a factor payment for the use of the bookstore owner’s property, contributing to economic output.
Case Study 30:
A farmer grows apples and sells them to a juice company. Is the sale of apples to the juice company considered a final or intermediate transaction? Explain your answer.
Answer: The sale of apples to the juice company is considered an intermediate transaction. The apples are further processed into juice, which is the final product sold to consumers.
Case Study 31:
A tailor sews custom-made suits for clients. Is the income earned by the tailor for sewing suits included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned by the tailor for sewing custom-made suits is included in the calculation of national income. It represents a factor payment for tailoring services, contributing to economic output.
Case Study 32:
A factory purchases electronic components to assemble smartphones. Are the costs of these electronic components included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the electronic components purchased by the factory are included in the calculation of national income. They are considered intermediate goods used in the production of smartphones.
Case Study 33:
A retired police officer receives a monthly pension from the government. Is this pension income included in the calculation of national income? Explain your answer.
Answer: Yes, the pension income received by the retired police officer from the government is included in the calculation of national income. It represents a factor in payment for past services and contributes to economic output.
Case Study 34:
A musician earns income by selling digital music downloads online. Is this income included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned by the musician through the sale of digital music downloads is included in the calculation of national income. It represents a factor payment for their music, contributing to economic output.
Case Study 35:
A factory purchases raw materials to manufacture furniture. Are the costs of these raw materials included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the raw materials purchased by the factory are included in the calculation of national income. They are considered intermediate goods used in the production of furniture.
Case Study 36:
A retiree receives a monthly annuity payment from an insurance company. Is this annuity income included in the calculation of national income? Explain your answer.
Answer: No, the annuity income received by the retiree is not included in the calculation of national income. It represents a transfer payment and does not contribute to economic output.
Case Study 37:
A software company licenses its software to businesses on a subscription basis. Is the subscription income received by the software company included in the calculation of national income? Explain your answer.
Answer: Yes, the subscription income received by the software company is included in the calculation of national income. It represents a factor payment for the use of their software, contributing to economic output.
Case Study 38:
A construction company purchases roofing materials to build houses. Is the cost of the roofing materials included in the calculation of national income? Explain your answer.
Answer: Yes, the cost of the roofing materials purchased by the construction company is included in the calculation of national income. They are considered intermediate goods used in construction, contributing to economic output.
Case Study 39:
A retired nurse receives a monthly pension from a healthcare system. Is this pension income included in the calculation of national income? Explain your answer.
Answer: Yes, the pension income received by the retired nurse from a healthcare system is included in the calculation of national income. It represents a factor payment for past services and contributes to economic output.
Case Study 40:
A restaurant owner purchases fresh seafood to prepare dishes for customers. Are the costs of fresh seafood included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the fresh seafood purchased by the restaurant owner are included in the calculation of national income. They are considered intermediate goods used in the production of restaurant meals.
Case Study 41:
A construction worker is hired to renovate a historical building. Is the payment to the construction worker included in the calculation of national income? Explain your answer.
Answer: Yes, the payment to the construction worker for renovating the historical building is included in the calculation of national income. It represents a factor payment for their labor services, contributing to economic output.
Case Study 42:
A company purchases specialized machinery for its manufacturing process. Is the cost of the specialized machinery included in the calculation of national income? Explain your answer.
Answer: Yes, the
cost of the specialized machinery purchased by the company is included in the calculation of national income. It represents an investment in capital equipment, contributing to economic output.
Case Study 43:
A retiree receives monthly rental income from a residential property they own. Is this rental income included in the calculation of national income? Explain your answer.
Answer: Yes, the rental income received by the retiree from the residential property is included in the calculation of national income. It represents a factor payment for the use of the property, contributing to economic output.
Case Study 44:
A clothing store purchases fabric to make its own line of clothing. Are the costs of the fabric included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the fabric purchased by the clothing store are included in the calculation of national income. They are considered intermediate goods used in the production of clothing.
Case Study 45:
A retiree receives a monthly royalty payment from a book they authored. Is this royalty income included in the calculation of national income? Explain your answer.
Answer: Yes, the royalty income received by the retiree from their book is included in the calculation of national income. It represents a factor payment for their intellectual property, contributing to economic output.
Case Study 46:
A factory purchases raw materials to manufacture household appliances. Are the costs of these raw materials included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the raw materials purchased by the factory are included in the calculation of national income. They are considered intermediate goods used in the production of household appliances.
Case Study 47:
A retired firefighter receives a monthly pension from a municipal pension fund. Is this pension income included in the calculation of national income? Explain your answer.
Answer: Yes, the pension income received by the retired firefighter from the municipal pension fund is included in the calculation of national income. It represents a factor in payment for past services and contributes to economic output.
Case Study 48:
A photographer earns income by selling prints of their photographs online. Is this income included in the calculation of national income? Explain your answer.
Answer: Yes, the income earned by the photographer through the sale of prints is included in the calculation of national income. It represents a factor in payment for their artistic services, contributing to economic output.
Case Study 49:
A factory purchases electronic components to assemble televisions. Are the costs of these electronic components included in the calculation of national income? Explain your answer.
Answer: Yes, the costs of the electronic components purchased by the factory are included in the calculation of national income. They are considered intermediate goods used in the production of televisions.
Case Study 50:
A retiree receives a monthly pension from a private retirement account. Is this pension income included in the calculation of national income? Explain your answer.
Answer: Yes, the pension income received by the retiree from a private retirement account is included in the calculation of national income. It represents a factor in payment for past services and contributes to economic output.