Aggregates related to national income - Market price and factor cost

Use the identity GNP at market price = GNP at factor cost + indirect taxes − subsidies. First, the difference between the two GNP measures is net indirect taxes: ₹2,900 − ₹2,750 = ₹150 crore. Since net indirect taxes = indirect taxes − subsidies, subsidies = ₹210 − ₹150 = ₹60 crore. ₹150 crore is the net tax amount, not subsidies, so option B is correct.

The governing relation is market price = factor cost + indirect taxes − subsidies. Indirect tax equals 20% of ₹500, so it is ₹100. Therefore, market price = ₹500 + ₹100 − ₹10 = ₹590. The computed value exactly equals the stated price, so option A is correct. The other options result from omitting the subsidy, adding it, or miscalculating the tax.

The relationship is market price = factor cost + net indirect taxes. Net indirect taxes are 10% of the market price, so they equal 0.10 × ₹2,000 crore = ₹200 crore. Rearranging, factor cost = market price − net indirect taxes = ₹2,000 − ₹200 = ₹1,800 crore. Option C confuses market price with factor cost, while A and D do not follow the stated 10% deduction.

The governing formula is market price = factor cost + net indirect taxes. Net indirect taxes equal 12% of factor cost: 0.12 × ₹2,500 crore = ₹300 crore. Therefore, market price = ₹2,500 + ₹300 = ₹2,800 crore. Option B omits the taxes, option A subtracts an amount, and option D adds too much. Hence, option C is the only correct answer.

Net indirect taxes are calculated as indirect taxes minus subsidies. Subsidies equal 40% of ₹300 crore, so subsidies = 0.40 × ₹300 = ₹120 crore. Therefore, net indirect taxes = ₹300 − ₹120 = ₹180 crore. Option A is only the subsidy amount, option C subtracts the wrong amount, and option D adds tax and subsidy instead of finding their net difference. Thus B is correct.

Use market price = factor cost + net indirect taxes. In the ratio 11:10, the factor-cost value of 10 parts equals ₹3,000 crore, so one part equals ₹300 crore. Market-price output is 11 parts, or ₹3,300 crore. The difference is ₹3,300 − ₹3,000 = ₹300 crore, which is the net indirect tax. Therefore, option B is correct.

The governing relationship is Market Price = Factor Cost + Net Indirect Taxes, so NIT = MP − FC. From FC:MP = 21:20 and MP = ₹4,000 crore, factor cost is 4,000 × 21/20 = ₹4,200 crore. Therefore, NIT = 4,000 − 4,200 = −₹200 crore. The negative sign means subsidies exceed indirect taxes by ₹200 crore. Thus option B is correct; option A ignores the sign, while C and D use an incorrect ratio calculation.

The governing percentage principle is that if market price equals 108% of factor cost, then MP = 1.08 × FC. Rearranging gives FC = MP/1.08 = ₹2,160/1.08 = ₹2,000 crore. Hence option B is correct. Multiplying ₹2,160 by 1.08 gives ₹2,332.8 crore, but that would incorrectly increase the already known market price instead of recovering the original factor cost. The other values do not satisfy the stated 108% relationship.

Use the stated percentage relationship: Factor Cost = 110% of Market Price = 1.10 × MP. Therefore, MP = ₹2,200/1.10 = ₹2,000 crore. Option B is correct. ₹2,420 crore comes from multiplying ₹2,200 by 1.10, but ₹2,200 is already the factor cost, which is the 110% value; it must be divided by 1.10 to find the base market price. The other choices do not produce a 110% factor-cost figure.

The governing identity is GDP at factor cost = GDP at market price − Net Indirect Taxes. Net indirect taxes equal 1/9 of ₹3,600 crore, so NIT = 3,600 × 1/9 = ₹400 crore. Therefore, GDP at factor cost = ₹3,600 − ₹400 = ₹3,200 crore. Option C is correct. Options A and B subtract too much, while option D adds the tax instead of removing it when converting from market price to factor cost.

Let factor cost be x crore. By the governing identity, market price = factor cost + net indirect taxes. Since NIT = x/8, ₹2,700 = x + x/8 = 9x/8. Thus x = 2,700 × 8/9 = ₹2,400 crore. Option C is correct. At ₹2,400 crore, NIT is ₹300 crore and their sum is ₹2,700 crore. The other options fail this equation and do not reproduce the stated market price.

The governing formula is NIT = Market Price − Factor Cost. Since MP = 9/10 of FC and MP is ₹1,800 crore, factor cost = 1,800 × 10/9 = ₹2,000 crore. Hence NIT = 1,800 − 2,000 = −₹200 crore. Option B is correct. The negative value indicates that subsidies exceed indirect taxes by ₹200 crore. A positive ₹200 crore reverses the subtraction, while ₹180 crore and −₹180 crore use the wrong amount.

Net indirect taxes equal market price minus factor cost. Initially, NIT = ₹2,500 − ₹2,300 = ₹200 crore. Later, market price is ₹2,600 crore and factor cost is ₹2,340 crore, so new NIT = ₹260 crore. The change is ₹260 − ₹200 = ₹60 crore increase. Option B is correct. Equivalently, NIT changes by the rise in market price minus the rise in factor cost: ₹100 − ₹40 = ₹60 crore.

Because NIT = market price − factor cost, the initial statement means NIT = −₹50 crore: market price was ₹50 crore below factor cost. An increase of ₹30 crore changes NIT to −₹50 + ₹30 = −₹20 crore. Thus market price remains below factor cost, but only by ₹20 crore. Option B is correct. It does not become −₹80 crore because the NIT increase reduces the negative gap, and it does not become positive or zero.

The governing idea is that a change equals final value minus initial value. Here, final NIT = −₹20 crore and initial NIT = ₹100 crore. Therefore, change = (−20) − 100 = −₹120 crore. The negative sign indicates a decrease, so the correct answer is option C: a decrease of ₹120 crore. Option A would result from ignoring that the final value is negative; option D gives the wrong direction.

The governing relationship is MP − FC = NIT, so the gap between market price and factor cost is equal to net indirect taxes. Initially the gap was −₹60 crore and finally it was ₹40 crore. Change = 40 − (−60) = ₹100 crore, an increase. Therefore, option D is correct. Options B and C do not fully account for the movement across zero and the initial negative sign.

The governing identity is MP = FC + NIT. Since factor cost remains unchanged, any change in market price must equal the change in net indirect taxes. NIT changes from ₹180 crore to −₹20 crore: change = (−20) − 180 = −₹200 crore. Thus market price decreases by ₹200 crore, making option C correct. The ₹160 crore option ignores the negative sign, while option D reverses the direction.

Use FC = MP − NIT. With the same market price, the economy paying or including the smaller net indirect tax has the larger factor cost. The first economy has NIT of ₹250 crore and the second ₹100 crore, a difference of ₹150 crore. Therefore, the second economy’s factor cost is ₹150 crore higher, so option B is correct. The higher tax in the first economy reduces its factor-cost component relative to the same MP.

Net indirect tax equals indirect tax minus subsidy. For the first firm, NIT = 90 − 20 = ₹70. For the second, NIT = 70 − 5 = ₹65. Since factor cost is equal, MP = FC + NIT means the first firm’s market price is ₹5 higher. Thus option A is correct. Comparing only gross taxes would give the wrong result because subsidies must be deducted.

The governing conversion rule is GNP at market price = GNP at factor cost + net indirect taxes, because market price includes the tax effect net of subsidies. Therefore, GNP at market price = ₹18,300 crore + ₹1,050 crore = ₹19,350 crore. Hence, option C is correct. Option A incorrectly subtracts the taxes, while option B ignores them and option D adds an excessive amount.

National income is NNP at factor cost. To convert NNP at market price into NNP at factor cost, subtract net indirect taxes, where net indirect taxes = indirect taxes − subsidies = ₹1,150 − ₹300 = ₹850 crore. Thus, national income = ₹16,200 − ₹850 = ₹15,350 crore. Option B is correct. Option A subtracts the gross tax figure, whereas options C and D do not apply the required adjustment correctly.

When market price is 14 percent higher than factor cost, calculate 14 percent of the original factor-cost amount and add it to that amount. Fourteen percent of ₹7,500 crore is ₹1,050 crore. Therefore, market price = ₹7,500 + ₹1,050 = ₹8,550 crore, so option C is correct. ₹8,400 crore reflects only a 12 percent increase, while the other figures use an incorrect percentage adjustment.

The percentage comparison is based on market price because factor cost is stated to be 8 percent higher than market price. Eight percent of ₹10,000 crore is ₹800 crore. Hence, factor cost = ₹10,000 + ₹800 = ₹10,800 crore, making option C correct. Option A represents an 8 percent decrease, option B shows no change, and option D applies an excessive increase.

Net indirect taxes equal 6 percent of market price, so their amount is 6% × ₹20,000 crore = ₹1,200 crore. Since market price = factor cost + net indirect taxes, factor cost = market price − net indirect taxes = ₹20,000 − ₹1,200 = ₹18,800 crore. Therefore, option C is correct. The other options result from using an incorrect percentage or subtracting the wrong amount.

The governing relationship is Market Price = Factor Cost + Net Indirect Taxes. Since net indirect taxes are 12% of ₹10,000 crore, they equal 0.12 × 10,000 = ₹1,200 crore. Therefore, market price = ₹10,000 + ₹1,200 = ₹11,200 crore, so option C is correct. Option A uses only 1.2%, while option D treats the tax as 20% of factor cost.