Ryan Is a Canadian Resident Who Lives with His Family

Essay

Ryan is a Canadian resident who lives with his family in Victoria, Canada, but works for a small donut cafe in Seattle, U.S., where he commutes every day. On a typical day, Ryan produces 400 donuts that sell for $1 apiece. Of the revenue from selling the donuts, Ryan is paid $200 per day. The remaining $200 revenue is distributed as follows: $50 pays for inputs such as water, flour, sugar, butter, and energy, $100 is rent for using the facilities and interest for an initial loan to start the business, and $50 goes to salary to the manager and profit to the owner of the café.
a) How much is the increase in U.S. GDP generated by the production of the 400 donuts?
b) How much is the increase in Canada's GDP generated by the production of the 400 donuts?
c) How much is Ryan's contribution to the creation of the $400 value of donuts? Explain your answer.
d) Since Ryan takes his income home to Canada, should the U.S. allow foreign workers such as Ryan to take jobs that might otherwise go to American workers?