Suppose that in a country there are two firms A & B. during a period of time a) Firms A imports raw material costing Rs. 8000 and pays its workforce Rs. 16000 to produce output which it sells to firm B for Rs. 30,000. b) Firm 8 buys the otput of firm A for Rs. 30,000. And pays its work force Rs. 20,000 to produce output which it sells for Rs. 60,000 plus sales tax of Rs. 9000 out of their total income of Rs. 69,000. c) The workforce of firms A and B pay inomce tax of Rs. 5000 out of their total income of Rs. 36000 d) Firm A makes a pre-tax profit of Rs(30000 – 8000 – 16000) = 6000 and pays a profit tax of Rs. 2000 out of this. e) Firm B makos o pre-tax profit of Rs(60000-30000- 20000) = 10000 and pays a profit tax of Rs. 3000 out of this. 0 The governmont's tax income is sales tax of Rs. 9000, Income tax of Rs S000 and profit tax of Rs.

Suppose that in a country there are two firms A & B. during a period of time a) Firms A imports raw material costing Rs. 8000 and pays its workforce Rs. 16000 to produce output which it sells to firm B for Rs. 30,000. b) Firm 8 buys the otput of firm A for Rs. 30,000. And pays its work force Rs. 20,000 to produce output which it sells for Rs. 60,000 plus sales tax of Rs. 9000 out of their total income of Rs. 69,000. c) The workforce of firms A and B pay inomce tax of Rs. 5000 out of their total income of Rs. 36000 d) Firm A makes a pre-tax profit of Rs(30000 – 8000 – 16000) = 6000 and pays a profit tax of Rs. 2000 out of this. e) Firm B makos o pre-tax profit of Rs(60000-30000- 20000) = 10000 and pays a profit tax of Rs. 3000 out of this. 0 The governmont's tax income is sales tax of Rs. 9000, Income tax of Rs S000 and profit tax of Rs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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