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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.

Difficulty: Easy

₹300
₹400
₹500
₹600

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

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