Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Market prices | (I) | Include net production taxes but not net product taxes |
| (B) | Factor cost | (II) | Price at which goods are traded in bulk |
| (C) | Basic prices | (III) | Prices as paid by the consumers |
| (D) | Wholesale price | (IV) | Includes only the payment to factors of production |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
The same output can be valued at three kinds of prices, depending on which taxes are counted.
| List-I | List-II | Reason |
|---|---|---|
| (A) Market prices | (III) Prices as paid by the consumers | Market prices are the prices paid by consumers. |
| (B) Factor cost | (IV) Includes only the payment to factors of production | Factor cost includes only the payment to factors, no tax. |
| (C) Basic prices | (I) Include net production taxes but not net product taxes | Basic prices include production taxes but not product taxes. |
| (D) Wholesale price | (II) Price at which goods are traded in bulk | The wholesale price is the price at which goods are traded in bulk. |
NCERT (2026-27): “Table 2.4: Basic National Income Aggregates … Market prices are the prices as paid by the consumers Market prices also include product taxes and subsides. The term factor cost refers to the prices of products as received by the producers. …” “2.2.4 Factor Cost, Basic Prices and Market Prices … Factor cost includes only the payment to factors of production, it does not include any tax. In order to arrive at the market prices, we have to add to the factor cost the total indirect taxes less total subsidies. The basic prices lie in between: they include the production taxes (less production subsidies) but not product taxes (less product subsidies). …” “2.4 Nominal and Real GDP It is worth noting that many commodities have two sets of prices. One is the retail price which the consumer actually pays. The other is the wholesale price, the price at which goods are traded in bulk. These two may differ in value because of the margin kept by traders. Goods which are traded in bulk (such as raw materials or semi-finished goods) are not purchased by ordinary consumers. …” |