The following data relate to a closed economy of a country where all production takes place in two firms. Use the information in the table to answer the questions that follow:
| Items | Firm A (in 000 Dollars) | Firm B (in 000 Dollars) |
| Sales | 200 | 400 |
| Raw material | 100 | 60 |
| Labour costs | 80 | 160 |
| Depression | 16 | 40 |
| Profits | 4 | 140 |
(a)(i) Which of the items listed above is an intermediate input?
(ii) What happens to intermediate inputs in the calculation of the national income?
(iii) Calculate the Gross Domestic Product (GDP) of the country.
(b)(i) Calculate the total amount of depreciation of the country
(ii) Calculate the Net Domestic Product of the country.
Explain the factors which influence the level of wages in your country.
(a) Distinguish between fixed and variable costs.
(b) Under which conditions will a firm continue to operate at a loss in the short run? (Use figures or a diagram to explain your answer).
(a) What is a perfectly competitive market?
(b) Explain the conditions necessary for a perfectly competitive market,
