To calculate the total Gross Domestic Product (GDP) for this economy, we use the expenditure approach, which considers the value of final goods and services produced within the economy. The formula is:

$GDP = \sum (\text{Value of Final Goods})$

Step 1: Identify Final and Intermediate Goods

Final goods are those that are not used as inputs in production and are directly consumed. Intermediate goods are those used in the production of other goods.

Given data:

• Paper: $8,000
• Books: $15,000
• Toner: $4,000
• Envelopes: $5,000

However, not all goods are final goods because some are used as inputs in production.

Intermediate Goods Used in Production:

• Paper used in books: $4,000
• Toner used in books: $2,500
• Paper used in envelopes: $2,500

Step 2: Use the Value-Added Approach

Since intermediate goods should not be double-counted in GDP, we exclude them. The value-added approach considers only the contribution of each sector:

$GDP = (\text{Paper Output} - \text{Paper Used}) + (\text{Books Output}) + (\text{Toner Output} - \text{Toner Used}) + (\text{Envelopes Output})$

Substituting values:

$GDP = (8,000 - 6,500) + 15,000 + (4,000 - 2,500) + 5,000$

$GDP = 1,500 + 15,000 + 1,500 + 5,000$

$GDP = 23,000$

Final Answer:

The total GDP for the economy is $23,000.

---

Would you like further explanation or an alternative method for calculating GDP?

Here are some related questions to expand your understanding:

1. What are the three main approaches to calculating GDP?
2. How does the value-added approach prevent double counting?
3. What would happen to GDP if book production increased by 20%?
4. How do intermediate goods differ from final goods in GDP calculation?
5. What role does the production of capital goods play in GDP?

Tip: Always ensure that intermediate goods are not double-counted in GDP to avoid overestimating economic output.