If a Local Shop Buys a Used Motorcycle for $1,000

Multiple Choice

If a local shop buys a used motorcycle for $1,000, makes repairs and refurbishes it, then resells it for $2,500, the

A) shop contributes value added equal to $1,500, but nothing is added to GDP.
B) shop contributes value added equal to $1,500, and consequently $1,500 is added to GDP.
C) shop contributes nothing to production because only existing goods are involved.
D) shop contributes value added equal to $2,500, but only $1,500 is added to GDP.