Factor cost has the following uses in economics:
- Factor cost or national income by type of income is a measure of national income or output based on the cost of factors of production, instead of market prices. This allows the effect of any subsidy or indirect tax to be removed from the final measure.
- Factor cost can also refer to the unit cost of a particular factor of production (input in the production process), such as the wage rate or the rental rate of capital.
- Factor Cost or Factor Income are the incomes received by the owners of the production (the households) for rendering their factor services to the producers. Corresponding to the real flow of factor services from the households to the producers, there is a money flow from the producers to the households in the form of rent,interest,profit and wages. As a consequences of these flows, there is a production of goods and services in the economy.
Famous quotes containing the words factor and/or cost:
“Children of the middle years do not do their learning unaffected by attendant feelings of interest, boredom, success, failure, chagrin, joy, humiliation, pleasure, distress and delight. They are whole children responding in a total way, and what they feel is a constant factor that can be constructive or destructive in any learning situation.”
—Dorothy H. Cohen (20th century)
“Every new stroke of civilization has cost the lives of countless brave men, who have fallen defeated by the “dragon,” in their efforts to win the apples of the Hesperides, or the fleece of gold. Fallen in their efforts to overcome the old, half sordid savagery of the lower stages of creation, and win the next stage.”
—D.H. (David Herbert)