Factor Cost and Market Price
Economics ⇒ National Income and Related Aggregates
Factor Cost and Market Price starts at 12 and continues till grade 12.
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Define factor cost in the context of national income accounting.
Describe how subsidies affect the relationship between factor cost and market price.
Describe the impact of a decrease in indirect taxes on the relationship between factor cost and market price.
Describe the process of converting gross domestic product at market price (GDPMP) to gross domestic product at factor cost (GDPFC).
A country has a national income at factor cost of ₹10,000 crore and net indirect taxes of ₹1,500 crore. What is the national income at market price?
A country has GDP at market price of ₹5,000 crore and net indirect taxes of ₹500 crore. What is GDP at factor cost?
A product has a factor cost of ₹500, indirect taxes of ₹60, and subsidies of ₹10. Calculate its market price.
Explain with an example how to convert national income at market price to national income at factor cost.
Choose the correct formula to convert National Income at Factor Cost (NIFC) to National Income at Market Price (NIMP): (1) NIFC + Net Indirect Taxes (2) NIFC - Net Indirect Taxes (3) NIFC + Direct Taxes (4) NIFC - Direct Taxes
Which of the following best describes the effect of an increase in indirect taxes on the market price? (1) Increases market price (2) Decreases market price (3) No effect (4) Decreases factor cost
Which of the following is included in market price but not in factor cost? (1) Indirect taxes (2) Direct taxes (3) Subsidies (4) Depreciation
Which of the following is NOT a component of factor cost? (1) Wages (2) Rent (3) Indirect taxes (4) Profits
Fill in the blank: ________ are government payments that reduce the market price below the factor cost.
Fill in the blank: GDP at Market Price = GDP at Factor Cost + ________.
Fill in the blank: Market Price = Factor Cost + ________.
Fill in the blank: National income at ________ is the sum of incomes earned by factors of production within a country.
Is it correct to say that factor cost reflects the true income of the factors of production?
Is the following statement correct? 'Factor cost is always less than market price.'
State whether the following is true or false: 'Direct taxes are included in the calculation of market price.'
State whether the following is true or false: 'Net indirect taxes can be negative.'
