Suppose there are only two firms in an economy: cowhide, inc. produces leather and sells it to couches, inc., which produces and sells leather furniture. with each $1,000 worth of leather that it buys from cowhide, inc., couches, inc. produces a couch and sells it for $2,600. neither firm had any inventory at the beginning of 2015. during that year, cowhide produced enough leather for 25 couches. couches, inc. bought 80% of that leather for $20,000 and promised to buy the remaining 20% for $5,000 in 2016. couches, inc. produced 20 couches during 2015 and sold each one during that year for $2,600. what was the economy's gdp for 2015?
a. $25,000
b. $52,000
c. $57,000
d. $65,000

C) $57,000

Explanation:

The gross domestic product is the total production of final and legal goods and services in an economy.

total production of final goods = (20 couches x $2,600 per couch) + (5 leather sets x $1,000 per set) = $52,000 + $5,000 = $57,000

the leather sets are considered final products since they are part of the ending inventory of Cowhide, Inc.  

consumer credit. an advantage is that it allows consumers to afford expensive goods and services now, increasing their standard of living. however, a disadvantage is that it creates a trap for debt, if people do not have self control, they may see themselves filing personal bankruptcy.

riley- $3

sean- $4

jake- $8

riley has the absolute advantage.