Let us suppose there is an economy which produces only bread. In this economy farmers produce wheat worth ₹150, bakers produce bread worth ₹350. The value added by these economic activities is _________.

350

The correct answer is option (2) : 350

The value added by economic activities is calculated by considering the difference between the value of output (bread) and the value of intermediate goods (wheat). Here's how we calculate it:

• Value of wheat produced by farmers: ₹150
• Bakers produce bread worth ₹350, but they use wheat worth ₹150 as input. So, value added by bakers = ₹350 (final output) − ₹150 (input) = ₹200

The question asks about "value added by these economic activities" that will mean value added by both by farmer and baker.

Thus, correct answer would be Option 1 – ₹150 (farmers) + ₹200 (bakers) = ₹350

In case the question asks about value added by Bakers:

Value added by bakers = Value of bread - Value of wheat Value added by bakers

                                  = ₹350 - ₹150 Value added by bakers

                                  = ₹200

Note: This is a PYQ and the answer marked by NTA is Rs 200 which seems to be incorrect.