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 _________.

200

The correct answer is option (3) : 200

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
• Value of bread produced by bakers: ₹350

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

                                  = ₹350 - ₹150 Value added by bakers

                                  = ₹200