Question : The value added at different stages of production in an economy is as follows (in INR):
Stage 1: INR 400,000
Stage 2: INR 300,000
Stage 3: INR 200,000
If the total value of intermediate consumption is INR 250,000, what is the value of final goods produced in the economy?
Option 1: INR 650,000
Option 2: INR 750,000
Option 3: INR 850,000
Option 4: INR 950,000
Correct Answer: INR 650,000
Solution : The correct answer is (a) INR 650,000
To find the value of final goods produced in the economy, we need to subtract the total value of intermediate consumption from the sum of the value added at each stage.
Stage 1: INR 400,000
Stage 2: INR 300,000
Stage 3: INR 200,000
Total value of intermediate consumption: INR 250,000
To find the value of final goods, we subtract the total value of intermediate consumption from the sum of the value added at each stage:
Value of final goods = (Stage 1 + Stage 2 + Stage 3) - Total value of intermediate consumption
Value of final goods = (INR 400,000 + INR 300,000 + INR 200,000) - INR 250,000
Value of final goods = INR 900,000 - INR 250,000
Value of final goods = INR 650,000
Therefore, the value of final goods produced in the economy is INR 650,000.
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