When Computing Value Added for a Firm, the Costs of Materials

question 116

True/False

When computing value added for a firm, the costs of materials purchased are deducted but the costs of labor employed are included.

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Definitions:

Government Regulation

Government regulation encompasses the laws and rules set forth by the government intended to control or manage certain practices, activities, or behaviors within an economy or society.

Entry Barriers

These are obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Government Failure

Situations where government interventions in the economy cause more inefficiency and problems than they solve.

Competitive Markets

Markets in which there are many buyers and sellers so that each has a negligible impact on the market price.