For each scenario, calculate each domestic firm’s value added as well as the total contribution
to domestic GDP.
(a) 2025 Bobo’s Brews (located in Toronto) imported $25,000 worth of coffee beans from
Ethiopia, hired $500,000 in labour, and then roasted the beans and sold the resulting
coffee for $750,000.
(b) 2026 Only difference from 2025 is that the coffee beans went to Gonzo roasters (located
in Vancouver), who roasted the beans and sent the roasted beans to Bobo’s Brews in
exchange for $75,000.
(c) 2027 Only difference is that Bobo fired its accountant Zara who was making $75,000
per year, and retained the accounting firm Toronto Numbers (located in Toronto). Bobo
paid Toronto Numbers $70,000 per year, and Toronto Numbers in turn hired Zara at
$64,000 for the year.
(d) 2028 Only difference is that Toronto numbers lost the accounting contract (and fired
poor Zara). Bobo retained the services of Mumbai Numbers (located in Mumbai, India),
paying it $55,000 for accounting services.