Question

Each year, Johan typically does all his own landscaping and yard work. He spends $\backslash (200$per year on mulch for his flower beds, $\backslash )225$per year on flowers and plants, $\backslash (50$on fertilizer for his lawn, and $\backslash )245$on gasoline and lawn mower maintenance. The lawn and garden store where he obtains his mulch and fertilizer charges other customers $\backslash (500$for the service of spreading that much mulch in flower beds and$\backslash )50$ for the service of distributing fertilizer over a yard the size of Johan's. Paying a professional yard care service to mow his lawn would require an expenditure of $\$1,200$per year, but in that case Johan would not have to buy gasoline or maintain his own lawn mower.

Short answer

Option a

As a result, the contribution to GDP is $\$720$.

Option b

As a result, the contribution to GDP is $\$1270$.

Option c

As a result, the contribution to GDP is$\$2470$.

Step-by-step solution

Step 1:    Explanation of option a

a) The total market value of all the final output of goods and services produced and transacted in an economy in a given year is GDP.

    Contribution of GDP

John mows his own lawn and spreads mulch and fertiliser on a regular basis. As a result, these activities can't be counted as part of GDP because they don't involve any market transactions.

However, only purchases of mulch, flowers, and plants, as well as fertiliser, gas, and other upkeep, can be included, and these transactions will contribute to GDP.

Contribution to GDP

$=\$200+\$225+\$50+\$245$

$=\$720$

As a result, the contribution to GDP is$\$720$.

    Explanation of option b

b) If John mows his lawn himself and hires a 'lawn and garden centre' to apply mulch and fertiliser. He must then pay for these services, which will be factored into the GDP calculation.

As a result, payments for mulch, flowers and plants, fertiliser, 'gas and other upkeep,' and spreading mulch and fertilisers all contributed to GDP.

Contribution towards GDP

$$\begin{gathered} =\$200+\$225+\$50+\$245+\$500+\$50 \\ =\$1270 \end{gathered}$$

As a result, the contribution to GDP is $\$1270.$

     Explanation of option c 

c) If, in addition to hiring a lawn and garden centre to spread mulch and fertiliser, John engages a professional yard care service to mow his grass. He must then pay for these services, which will be factored into the GDP calculation.

Payments for mulch, flowers and plants, fertiliser, 'gas and other maintenance,' spreading mulch and fertilisers, and mowing the lawn were all included in the GDP contribution.

Contribution towards GDP

$$\begin{gathered} =\$200+\$225+\$50+\$245+\$500+\$50+\$1200 \\ =\$2470 \end{gathered}$$

As a result, the contribution to GDP is $\$2470$