VSS eLearning exercises: SNA Intro
Lesson 1 Exercise: Basic and purchasers’ prices in the SUT
Basic information:
1. A farmer produces 300 tons of pineapple.
2. The farm-gate price is 250 Lari per ton.
3. Half the production is bought by a factory to be made into jam and the other half is
sold to households as fresh pineapples.
4. The jam factory buys the pineapples directly from the farmer so there is no trade
margin but the factory still has to pay transport costs.
5. Households buy from a retailer who charges a margin of 10% on the cost of the
pineapples at farm-gate prices plus the transport charge.
6. The factory does not pay any sales tax, but households are charged sales tax at 15% of
the retail price. (The retail price is the farm gate price plus both the transport charge
and the retail margin.)
7. Transport charge is 4 Lari per ton and is the same for both the factory and the retailer.
Questions.
What are:
1. Production at basic prices?
2. Transport cost?
3. Trade margin?
4. Product taxes?
5. Intermediate consumption?
6. Household consumption expenditure?
7. Supply at purchasers’ prices?
Give your answers in this supply and use table.
Production
at basic
prices
Transport
cost
Trade
margin
Product
taxes
Supply at
market
prices
Intermediate Household
consumption consumption
expenditure
VSS eLearning exercises: SNA Intro
Answers:
Production
at basic
prices
75 000
Transport
cost
Trade
margin
Product
taxes
1 200
3 810
6 286.5
Supply at
Intermediate
purchasers’ consumption
prices
86 296.5
38 100
Household
consumption
expenditure
48 196.5
Production at basic prices: 300 x 250 = 75 000
Transport cost: 300 x 4 = 1 200 (Divided equally between intermediate and household
consumption)
Trade margin: ((150 x 250) + 600) x 0.10 = 3 810
Product taxes: (37 500 + 600 + 3810) x 0.15 = 6 286.5
Intermediate consumption: (37 500 + 600) = 38 100
Household consumption expenditure: 37 500 + 600 + 3 810 + 6286.5 = 48 196.5
Supply at purchasers’ prices: 75 000 + 1 200 + 5 715 + 6286.5=38 100 + 50 101.5=88 201.5