Let's solve this problem step by step.
### Calculation of Consumption (C)
Consumption in economic terms typically includes goods and services used by individuals. For Crusoe, this would entail the fish he catches and eats, as well as the coconuts he grows and eats.
1. Fish Consumption:
- Crusoe catches and eats 2000 fish.
- The value of each fish is £1.
Therefore, the total value of the fish consumed is:
[tex]\[
2000 \text{ fish} \times £1 \text{ per fish} = £2000
\][/tex]
2. Coconut Consumption:
- Crusoe grows and eats 4000 coconuts.
- The value of each coconut is £0.5.
Therefore, the total value of the coconuts consumed is:
[tex]\[
4000 \text{ coconuts} \times £0.5 \text{ per coconut} = £2000
\][/tex]
Turning these into total consumption ([tex]\( C \)[/tex]):
[tex]\[
C = £2000 \text{ (fish)} + £2000 \text{ (coconuts)} = £4000
\][/tex]
### Calculation of Investment (I)
Investment generally refers to spending on goods that will be used in the future to generate wealth. For Crusoe, this would include the huts he makes.
1. Huts (Housing):
- Crusoe makes 2 huts.
- The value of each hut is £200.
Therefore, the total value of the huts made (investment) is:
[tex]\[
2 \text{ huts} \times £200 \text{ per hut} = £400
\][/tex]
### Calculation of Total Output (Y)
The total output in an economy is the sum of consumption ([tex]\( C \)[/tex]) and investment ([tex]\( I \)[/tex]).
[tex]\[
Y = C + I
\][/tex]
Substituting the values obtained for [tex]\( C \)[/tex] and [tex]\( I \)[/tex]:
[tex]\[
Y = £4000 + £400 = £4400
\][/tex]
Therefore, the values are:
[tex]\[
C = £4000
\][/tex]
[tex]\[
I = £400
\][/tex]
[tex]\[
Y = £4400
\][/tex]
So, the results are:
[tex]\[
C = £4000
\][/tex]
[tex]\[
I = £400
\][/tex]
[tex]\[
Y = £4400
\][/tex]
