Practice Factor Cost, Basic Prices And Market Prices (2.2.4)

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6 sample questions

Question 1.
Define GVA in your own words.
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Think about output and what is used in its production.
Question 2.
What does factor cost exclude?
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Consider what costs are associated with just production.
3Question 3.
What does GVA stand for?
- Gross Value Added
- Gross Variable Analysis
- General Value Accounting
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Remember the acronym when studying.
4Question 4.
True or False: Market prices include production taxes but exclude product taxes.
- True
- False
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Consider what market prices are comprised of.
Question 5.
Suppose the GVA at basic prices of a country is 2000 units. If the net product taxes incurred are 300 units, calculate the GDP at market prices.
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Add the product taxes to the basic prices.
Question 6.
A factory has factor costs of 1500. It incurs production taxes of 200 and receives subsidies of 50. Calculate its basic prices.
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Remember to net the production taxes and subsidies together.

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