Question:
A paddy farmer sells paddy to a rice miller for Rs. 10 000 and the rice miller sells rice to a rice flour miller for Rs. 12 000 and the flour miller sells flour to a noodles manufacturer for Rs. 15 000 and the noodles manufacturer sells noodles to consumers for Rs. 20 000. In this production process, what is the total value added by rice miller and noodles manufacturer?
(1) Rs. 10 000
(2) Rs. 7 000
(3) Rs. 5 000
(4) Rs. 3 000
(5) Rs. 2 000
Correct Answer:
(2)
Answer Explanation:
Value Added = Value of Output – Value of Intermediate Inputs. Rice Miller’s value added: 12,000 – 10,000 = 2,000. Noodles Manufacturer’s value added: 20,000 – 15,000 = 5,000. Total value added by both = 2,000 + 5,000 = 7,000.
Topic: National Income Year: 2021
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