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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
(a) Distinguish between ‘Value Addition’ and ‘Final Value of Output’.
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 2023 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.