Math Description Final goods sector: produce Y using capital kl labor n1, and materials m, with prices: r, W, p. The production function isY=f(ki, n,m), all the revenue is distributed to capital owners, workers and material producers, i. e. Y=rk +wn,+pm Material goods sector: produce m using capital k2 and labor n2: m=g(k2, n2). The total revenue is distributed to capital owners and workers, pm=rk,+wn, The gnp y is the value of final goods since it already records the value of intermediate goods m. Y is the total income of the nation Y=r(k,+)+w(n,+n, Copyright 2012 Pearson Education. All rights reserved 13-5Copyright © 2012 Pearson Education. All rights reserved. Math Description • Final goods sector: produce Y using capital k1 , labor n1 , and materials m, with prices: r, w, p. The production function is all the revenue is distributed to capital owners, workers and material producers, i.e., • Material goods sector : produce m using capital k2 and labor n2 : The total revenue is distributed to capital owners and workers, • The GNP Y is the value of final goods, since it already records the value of intermediate goods m. Y is the total income of the nation: 13-5 Y f k n m = ( 1 1 , , ,) 1 1 Y rk wn pm = + + . m g k n = ( 2 2 , .) 2 2 pm rk wn = + . Y r k k w n n = + + + ( 1 2 1 2 ) ( )