How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?
What will be an ideal response?
A negative value added means that the cost of the intermediate goods exceeds the price of the final product produced using the intermediate goods. For value added to be negative, a firm would use its primary factors of production, such as labor and capital equipment, to produce a product from the intermediate goods that is less valuable than the intermediate goods themselves.
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If the slope of a line that graphs the relationship between variable x and variable y is positive, then we know that
A) when the value of variable x increases, then the value of variable y decreases. B) when the value of variable x decreases, then the value of variable y decreases. C) the two variables are unrelated. D) the two variables have an inverse relationshi
Refer to Table 9-2. Select the statement that accurately interprets the data in the table
A) Gabriel has a comparative advantage in baking pies and baking cakes. B) Gabriel has an absolute advantage in baking cakes. C) Gabriel has a comparative advantage in baking pies. D) Sarita has a comparative advantage in baking pies.
Assume that the currency—deposit ratio is 0.3 and the reserve—deposit ratio is 0.2. What is the money multiplier?
A) 1.5 B) 2.0 C) 2.6 D) 5.0
Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
What will be an ideal response?