National income accounting: Compute value added in a simple production process. Output of utensils = ₹1000; intermediate inputs: copper ₹500 and other materials ₹100; wages = ₹100; depreciation = ₹0. Find the value added at this production stage.
General Knowledge
Indian Economy
Difficulty: Easy
Choose an option
-
A₹300
-
B₹400
-
C₹500
-
D₹600
Answer
Correct Answer: ₹400
Explanation
Given data
- Value of output = ₹1000
- Intermediate consumption = ₹500 + ₹100 = ₹600
- Wages (factor payment) = ₹100
- Depreciation = ₹0
Computation (production approach)Value Added = Output − Intermediate Consumption = 1000 − 600 = ₹400.
Check (income approach)Value Added = Wages (₹100) + Operating surplus/profit (₹300) = ₹400.
Final Answer₹400