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Economics · 2023 · 3 marks
National Income AccountingCircular Flow of Income and Methods of Calculating National Income3 marksApplyshort answer
CBSE 2023 · Region 1 · Set 1 · Q11
Distinguish between ‘Value Addition’ and ‘Final Value of Output’.Find the Value Added by Firm A, from the following information :S. No. Particulars Amount (in ₹ crore) (i) Purchase of factor inputs by Firm A $\displaystyle 5$ (ii) Purchase of non-factor inputs by Firm A $\displaystyle 2$ (iii) Sales by Firm A to other firms in the domestic economy $\displaystyle 10$ (iv) Import of raw materials by firm A from rest of the world $\displaystyle 50$ (v) Excess of opening stock over closing stock $\displaystyle 3$
Distinguish between ‘Value Addition’ and ‘Final Value of Output’.
Find the Value Added by Firm A, from the following information :
| S. No. | Particulars | Amount (in ₹ crore) |
| (i) | Purchase of factor inputs by Firm A | $\displaystyle 5$ |
| (ii) | Purchase of non-factor inputs by Firm A | $\displaystyle 2$ |
| (iii) | Sales by Firm A to other firms in the domestic economy | $\displaystyle 10$ |
| (iv) | Import of raw materials by firm A from rest of the world | $\displaystyle 50$ |
| (v) | Excess of opening stock over closing stock | $\displaystyle 3$ |
Marking-scheme solution
Value Addition refers to the excess of ‘Value of Output’ over the ‘Value of Intermediate Consumption’.
Value Addition = Value of Output – Value of Intermediate Consumption
Whereas;
Final Value of output refers to the total money value of goods and services produced during a given period of time.
Final Value of output = (Number of units produced) x (Price per unit)
Value added = Value of output - Intermediate consumption
Value added by firm A = (iii) - (v) – (ii + iv)
= $\displaystyle 10$ - $\displaystyle 3$ – ($\displaystyle 2$ + $\displaystyle 50$)
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CBSE Class 12 Economics past-paper question from the 2023board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.