8th Standard, Social Science, Economics, CHAPTER-28
BASIC CONCEPTS OF ECONOMICS
EXERCISES
I. Fill in the blanks with suitable words:
1. The production decreases when the demand decreases.
2. Goods and services used for the satisfaction of wants are consumption.
3. If the national income is divided by the nation’s total population we get per capita income.
4. Workers involved in carrying materials loading and unloading the cargo are called physical labour.
5. Workers involved in teaching the students, belong to mental labour workers.
II. Answer the following:
6. What is demand in economics?
Answer: Demand is not only a want, in addition to want if there is an attitude to buy and ability to spend money, then only it becomes demand. Demand is the quantity of economic goods that can be brought at a fixed price at a given time.
7. What is the influence of demand in the field of production?
Answer: When there is an increasing demand, generally production, employment, income and supply increases. The standard of living of the people improves. The nation continues to move in the progressive direction. When the demand decreases generally production, income and supply also decreases. The standard of living of the people decreases, the national progress also decreases. Unemployment increases. It is for this reason that demand is considered as the index of the Nation’s progress.
8. What is distribution?
Answer: Distribution is a very important economic activity. Distribution is to distribute the goods produced involving the interaction of the factors of production. The national income distributed among land, labour, capital and organisation are called rent, wages, interest and profit respectively.
9. How can distribution be done effectively?
ANSWER: The distribution takes place in the rate of the role played by each factor of production. It should balance the demand and supply without bringing an obstacle to production. Special importance should not be given to any factors of production nor should any of them be neglected. This is necessary to maintain equilibrium in the entire economic system.
10. Mention the differences between national income and per capita income?
Answer: The differences between national income and per capita income are as follows.
1 . National income is the sum total of money, value of all the goods and services produced in a country during a year. If the national income is divided by the total population of the Nation we get the per capita income.
2. National income is the total income obtained in a year from all the sources of production. But per capita income is an average income of the population of a country.
3. National income is the total value of all goods and services a country produces in a year, representing the country’s overall economic output, while per capita income is the average income per person, calculated by dividing the national income by the total population.
4. National income provides a measure of the size of the economy, whereas per capita income is used to assess the average standard of living.
11. What is the importance of labour?
Answer: It is the innate quality of man to work hard to accomplish and to improve the standard of living. This effort might be physical or mental. The physical labour requires physical strength, whereas mental labour requires intelligence. In developing nations the educated class will be more in number and they perform their work sincerely with concentration. Whether the task is physical or mental. The society does not discriminate and both the class of workers receive equal respect. Labour is essential for all the industries.
Labour increases productivity and efficiency, which leads to higher output, a better standard of living, and helps a country’s economy improve. Skilled workers can develop new ideas, improve existing products, and even invent new technologies. Labour is a fundamental component of production and plays a crucial role in the economy and society.
Additional Questions and Answers:
1 . What is Supply?
Answer: Supply is the quantity of goods and services readily available for sale in market at a given price.
2. What are the factors of Production?
Answer: Many factors like natural wealth, labour, capital and organisation are essential for production. The production function includes activities such as transport, trade and distribution. The function of production completes only when the goods and services reach the consumer.
3. What is Consumption? Mention the types of consumption.
Answer: The use of goods and services to satisfy wants is called consumption. The goods and services that are consumed may be good or bad but as long as they satisfy wants they will be consumed. There are two types of consumption. They are,
1. Goods and services used for production.
2. Finished goods used to satisfy wants.
4. Describe Utility. Mention the types of Utility.
Answer: Utility is the power of satisfying wants. It includes all goods and services which satisfy human wants directly or indirectly. But it cannot be measured. This varies from person to person. Also for the same person it varies from time to time and place to place. Attitudes and seasons may also influence utility. The different types of utility are as follows.
1. Principle utility
2. Form utility
3. Time utility
4. Place utility
5. What do you meant by ‘Price’?
Answer: The value that is expressed in the form of money is called price. The money that is to be paid in lieu of goods or services is called price.
6. What is profit?
Answer: Generally speaking the amount that remains after deducting the expenditure from the income of the production is called profit. According to economists the reward that the producer gets for the services rendered for production is called profit.
7. What is Co-operation?
Answer: Co-operation is an extraordinary system where people desire to come together to work on the basis of equality to protect their economic interest. The main aim of this is to achieve progress by self-help. There is no scope for competition here.
III Activities:
1. Visit a nearby market and observe how wants vary when the prices vary.
2. Read the News Papers and notice the daily variations in the economic field.
