From: Ian Wright (wrighti@ACM.ORG)
Date: Wed Oct 05 2005 - 14:53:11 EDT
Hi Ajit > The bean producers do not have to buy the beans in the > market. They simply use the beans they have produced > as inputs. So the cost of beans is always based on > imputed price of beans for the bean producers. In this > case they impute a price of beans that are different > from the price of beans they sell it in the market. > ajit sinha Arguably that may work for the special case of a single self-reproducing non-basic. It doesn't work for the general case of systems of self-reproducing non-basics. For example, suppose that beans are not directly required for their own production. Instead, they are inputs to n other non-basic sectors, of which m<n of those non-basic sectors are inputs to the bean sector. In which case, beans are indirectly required for their own production. The bean producers buy the m non-basics as inputs in the market. Is it the "imputed price" or the "market price" of beans that indirectly appears as a part of the cost of those inputs? -Ian.
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