2.2.4 - Factor Cost, Basic Prices and Market Prices
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Practice Questions
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Define GVA in your own words.
💡 Hint: Think about output and what is used in its production.
What does factor cost exclude?
💡 Hint: Consider what costs are associated with just production.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does GVA stand for?
💡 Hint: Remember the acronym when studying.
True or False: Market prices include production taxes but exclude product taxes.
💡 Hint: Consider what market prices are comprised of.
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Challenge Problems
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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.
💡 Hint: Add the product taxes to the basic prices.
A factory has factor costs of 1500. It incurs production taxes of 200 and receives subsidies of 50. Calculate its basic prices.
💡 Hint: Remember to net the production taxes and subsidies together.
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