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 _________.
Answer & explanation
Correct answer: option 3
The correct answer is option (3) : 200
Note: This is as per NTA. However, this appears to be incorrect. The correct answer should be ₹350, as explained below.
Value added is calculated at each stage of production:
- Farmers produce wheat worth ₹150 → since there are no intermediate inputs, value added by farmers = ₹150
- Bakers produce bread worth ₹350 using wheat worth ₹150 →
value added by bakers = ₹350 − ₹150 = ₹200
The question asks for “value added by these economic activities”, which refers to the total value added in the economy.
Therefore,
Total value added = ₹150 + ₹200 = ₹350
Hence, the correct answer should be Option (1) → ₹350.
If the question had asked only for value added by bakers, then the answer would be ₹200.