Barry\'s barbershop charged its customers $4,000 for haircuts last month. The sh

Question

Barry's barbershop charged its customers $4,000 for haircuts last month. The shop collected $300 in sales taxes and remitted it to the government. It purchased $500 worth of supplies (haircare products, disposable razors, etc) used to provide haircuts. One of its electric clippers, worth $100, wore out during the month. Barry paid $1,500 in wages to his hair cutters and took $1,500 cash out of the business for himself. He set aside $400 for state, local and federal income taxes. What was the shop's contribution to gross domestic product for the month? (do not include dollar sign or comma in answer)

Explanation / Answer

Contribution to GDP = Net Market value of goods created by the company

Contribution to GDP = market value created through the haircut – value of supplies consumed to create the haircuts

Contribution to GDP = 4000 – 500

Contribution to GDP = 3500

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