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NIOS Class 10 Economics Chapter 6 Basic Economic Activities
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Basic Economic Activities
Chapter: 6
MODULE 2: ABOUT ECONOMY
TEXTBOOK QUESTIONS (SOLVED)
INTEXT QUESTIONS 6.1
Q.1. Below is a list of some of the factors that are used to produce shorts. Group them into natural resources, human resources, fixed capital and working capital.
| Yarn, machinery, land for factory, wooden doors, colour, dye, building, sewing machine, telephones, marketing managers, advertising managers, packaging machines, scissors, buttons, bank loans, cash money. |
Ans.
Q.2. Which of the following is not a characteristics of land:
(a) Mobile.
(b) Gift of Nature.
(c) Limited in Quantity.
(d) Indestructible.
Ans. (a) Mobile is not the characteristic of land.
INTEXT QUESTIONS 6.2
Ram Singh a farmer in a village of Haryana who owns 2 hectares of land. Both he and his wife Rani work in the field. Earlier they only grew paddy on their land. Now they want to increase the productivity of their land by growing two crops and better variety of seeds and irrigation. They want to grow two crops, paddy and potatoes. For this they need money to buy good quality of seeds and fertilizers. As they do not have enough money, both work in other’s farms as labourers. They spend some money on fertilizers, seeds, pumpsets etc. After working very hard, they manage to have a good crop of both paddy and potato. They keep some paddy and potato grown in their farm for their personal use and sell the rest. They earn ₹ 12,000 by selling their crops.
(i) Identify the factors of production in this story.
(ii) What are capital goods used in this example?
Ans. (i) Factors of production in the story are as follows:
(a) Land.
(b) Labour.
(c) Capital. and
(d) Entrepreneur.
(ii) Fertilizer, seeds and pumps are capital goods.
INTEXT QUESTIONS 6.3
Q.1. Give two examples of durable goods, non-durable goods and services.
Ans. (i) Durable Goods:
(i) Television. and
(ii) Refrigerator.
(ii) Non-durable Goods:
(i) Bread. and
(ii) Butter.
(iii) Services:
(i) Services of a teacher.and
(ii) Services of a doctor.
Q.2. There is an excess of production over consumption in a year. Where does it go?
Ans. It goes to capital formation.
Q.3. How does production facilitate and capital formation?
Ans. An increase in production of goods and services increases the level of consumption and capital formation. More consumption is possible only when there is. more production and capital formation is possible only when production is more than consumption.
TERMINAL EXERCISE
Q.1. An agricultural land is a fixed resource. How can its productivity be increased?
Ans. The productivity of land can be increased by better irrigation facilities and machines.
Q.2. How can the productivity of labour be increased?
Ans. Productivity of labour can be increased through education and training.
Q.3. What are main functions of an entrepreneur?
Ans. Following are main functions of an entrepreneur:
(i) He initiates to start the process of production of goods or services by bringing land, labour and capital together in right proportion.
(ii) He bears the risks and uncertainties involved in the production.
(iii) He makes the payments to other factors of production in the form of interest, wages and rent.
(iv) He makes arrangement.
Q.4. How does capital add to the productivity of labour?
Ans. Capital adds to the productivity of labour by making him skillful through education and training.
Q.5. If there is an excess of production over consumption in a year, where does it go? Also mention two things which help in capital formation in an economy.
Ans. Excess of production over consumption goes to capital formation.
(i) Saving. and
(ii) Investment of savings in capital goods.
Q.6. Mention the three important economic activities and show their inter- relationship diagramatically.
Ans. Three important economic activities are as follows:
(i) Production.
(ii) Consumption. and
(iii) Capital formation.
Q.7. Purchase of a cycle by a household is treated as
(a) Capital formation.
(b) Production by households.
(c) Consumption.
(d) Production for self-consumption.
Ans. (c) Consumption.
Q.8. Which of the following statements are true or false?
(a) Capital formation increases the capital of a country.
Ans. True.
(b) Growing vegetable in the kitchen garden is not a part of production.
Ans. False.
(c) A farmer producing wheat for self-consumption is a part of production.
Ans. True.
(d) A teacher teaching school is production.
Ans. True.
(e) A student using stationery is production.
Ans. False.
(f) Digging a well by members of a family in their own field is a part of capital formation.
Ans. True.
(g) A truck transporting wheat from a village to the market in the nearby town is a part of production.
Ans. True.
Q. 9. Fill in the blanks:
(a) Roads constructed by the government are ________ (Production/Capital formation)
Ans. Production.
(b) Purchase of a tractor is a part of ________ (Production/Consumption)
Ans. Production.
(c) A new house purchased by an individual is ________ (Consumption/Production)
Ans. Production.
(d) A doctor is seeing a patient is ________ (Production/Consumption)
Ans. Production.
(e) A student studying in a school is ________ (Production/Consumption)
Ans. Production.
SOME IMPORTANT QUESTIONS FOR EXAMINATIONS
VERY SHORT ANSWER TYPE QUESTIONS
Q.1. What are the basic economic activities of an economy?
Ans. Production, consumption and capital formation are the basic economic activities of an economy.
Q.2. Why are scare resources used in the production of goods and services?
Ans. Scare resources are used in the production of goods and services to satisfy human needs and wants.
Q.3. How is the process of production of goods and services carried?
Ans. The process of production of goods and services is carried by combining the factors of production like land, labour, capital and entrepreneurship.
Q.4. Rent is paid to which factor of production?
Ans. Rent is paid to land.
Q.5. Name the owner of land.
Ans. The owner of land is known as land-lord.
Q.6. What does land include?
Ans. Land includes plain region, mountains and plateau region.
Q.7. What do mountain ensure?
Ans. Mountains ensure flow of rivers into plain region.
Q.8. What does plateau region possess?
Ans. Plateau region possesses reserves of minerals fossil fuels and forests.
Q.9. What are allied activities of Agriculture?
Ans. Animal husbandry, fisheries, forestry are called allied activities.
Q. 10. What is labour?
Ans. Labour is any mental or physical activity carried by a man to produce goods and services.
Q.11. What does capital mean?
Ans. Capital means man produced means of production.
Q.12. Give one point of difference between land and labour.
Ans. Land is immobile while labour is mobile.
Q.13. Which is the most perishable factor of production?
Ans. Labour is the most punishable factor of production.
Q.14. Give one point of difference between capital and land.
Ans. The supply of capital can be increased or decreased, whereas the supply of land is fixed.
Q.15. What do you mean by the immobility of land?
Ans. Mobility of land means that land cannot be shifted from one place another place.
Q.16. What do you mean by the statement of labour is perishable?
Ans. It means that labour cannot be stored like other goods such as machines. It perishes with the passage of time if it is not used.
Q.17. What do you mean by mobility of capital?
Ans. Mobility of capital means that capital can be shifted from one place to another.
Q.18. Who is an entrepreneur?
Ans. An entrepreneur is a person who takes the initiative to start the process of production of goods/services by bringing land, labour and capital together in right proportion and bears uncertainties and risks involved in production.
Q.19. Why is land called a passive factor of production?
Ans. Because land does not take active part in the production process.
Q.20. Why is land called a immobile?
Ans. Because land cannot be transferred from one place to another place.
Q.21. Which type of land is required for the production of food-grains vegetables, fruits etc.?
Ans. Agricultural land in the plain region is required for the production of food-grains, vegetables, fruits etc.
Q.22. Which type of land, possesses reserves of minerals, fossil fuels and forests?
Ans. Plateau region possesses reserves of minerals, fossil-fuels and forests.
Q.23. Out of urban or rural area of India, which are known for carrying agricultural and allied activities.
Ans. Rural area.
Q.24. How can the efficiency of land be increased?
Ans. Efficiency of land can be increased by of better irrigation facilities and machines.
Q.25. Why is capital call a passive factor of production?
Ans. Because capital cannot be used without employing labour to work.
Q.26. How can labourers acquire skill?
Ans. Labourers can acquire skill through education and training.
Q.27. State two types of capital.
Ans. (i) Fixed capital.
(ii) Working capital.
Q. 28. Give two examples of fixed capital.
Ans. (i) Heavy machines. and
(ii) Buildings.
Q.29. Which factor of production is responsible for choosing the right type of land, labour and capital and take decisions in respect to quantity to be produced, money to be spent to buy factories and materials, marketing the output produced etc.
Ans. Entrepreneurship.
Q.30. What is difference between entrepreneurship and entrepreneur?
Ans. Entrepreneurship is the art of organising the production activity whereas entrepreneur is the person who makes the decision and controls the production process and bears the risks and uncertainties in production.
Q.31. Who is responsible to make the payments to other factors of production?
Ans. Entrepreneur.
Q.32. What does an entrepreneur pay to the labourers, landlords and the owner of capital in return of their productive services?
Ans. An entrepreneur pays wages to the labourers, rent to the landlords and interest to the owner of capital.
Q.33. Why are payments such as rent, interest and profits called as factors of come?
Ans. Because these payments are received by the factors for their productive services.
Q. 34. Who owns land?
Ans. Landlord owns land.
Q.35. Labour is owned by whom?
Ans. Labour is owned by the labourer.
Q.36. Who owns capital?
Ans. People who acquire capital goods own capital.
Q.37. Who owns entrepreneurship?
Ans. Entrepreneur own entrepreneurship.
Q.38. We hire a piece of land and pay rent to the landlord. Why?
Ans. We pay rent to the landlord for using the services of land.
Q.39. Who pay the rent to the landlord for using the services of land?
Ans. The tenant pays the rent for using the services of land to the landlords.
Q.40. Can you call a teacher teaching in a school a labourer? Give reason in support of your answer.
Ans. Yes, because teaching is an economic activity which is undertaken for earning salary/income.
Q.41. Is a teacher an unskilled labourer? Give reason in support of your answer.
Ans. No, a teacher is not an unskilled labourer. He is a skilled labourer as he acquires of teaching through education and training.
Q.42. Mohan is doing purely physical work such as loading and unloading. He is called unskilled labourer/worker. Why?
Ans. Because his work of loading and unloading does not require any special skill.
Q.43. In what form does the entrepreneur get reward for his contribution to production?
Ans. In the form of profit.
Q.44. What is the main function of production?
Ans. Main function of production is to produce goods and services for consumption.
Q.45. What do you mean by consumption?
Ans. By consumption we mean using up of goods and services for the direct satisfaction of individual or collective human wants or needs.
Q.46. Is there any gap between production and consumption of services?
Ans. No, there is no time gap between production and consumption of goods. Production and consumption of services take place simultaneously.
Q.47. What do we consume when we visit a doctor and take his medical advice?
Ans. We consume doctor’s service.
Q.48. When goods are considered to be consumed?
Ans. Goods are considered to be consumed when they are purchased.
SHORT ANSWER TYPE QUESTIONS
Q.1. What do you mean by production? What is the goal of production?
Ans. Production means creation of utility. It is the result of combined efforts of the factors of production. The goal of production is to satisfy human wants.
Q.2. Give the features of labour.
Ans. Feature of Labour:
(i) Labour can not be separated for the labourer.
(ii) It is mobile.
(iii) It is perishable.
(iv) It is an active factor of production.
(v) Labourer sells his service only. He does not sell himself.
Q.3. Write down the features of land.
Ans. Features of Land:
(i) Land is a free gift of nature.
(ii) It is limited in quantity or areas.
(iii) It is indestructible.
(iv) It is immobile.
Q. 4. What do you mean by the terms, “Mobility of labour” and “Immobility of land”?
Ans. (i) Mobility of labour means that a labourer can shift from one place to another. He can be transferred from one place to another.
(ii) Immobility of land means that land can be shifted from one place to another place. It exists wherever it is provided by nature.
Q.5. Explain the various types of land such as plain region, mountains and plateau region.
Ans. (i) Plain Region: This type of land is useful for agricultural and industrial activities. It produces food-grains, vegetables, fruits etc. Allied activities like animal husbandry, fisheries and forestry are also undertaken in this region.
(ii) Mountains: They ensure flow of rivers into the plain region and provides facilities for tourism.
(iii) Plateau Region: This type of land possesses reserves of minerals-fossil fuels and forests.
Q.6. Draw a circular flow chart.
Ans.
Q.7. Name the form in which the entrepreneur makes the payments to other factors of production. What does he himself get for bearing risks and uncertainties.
Ans. The entrepreneur pays wages to labourers, rent to the landlords and interest to the of capital.
He himself gets profit (which is uncertain) for bearing risks and uncertainties.
Q.8. Describe the perishable character of labour.
Ans. Labour is the perishable factor of production. It cannot be stored. It perishes with the passage of time whether it is used or not. If an entrepreneur does not use one’s labour for an hour or a day, then the labour of this period goes wasted and is perished. Due to this perishable character, the workers have weak bargaining power.
Q.9. Can a labour be separated from a labourer? Give answer with reasons.
Ans. No labour cannot be separated from a labourer. The labourer has to go to that particular place where his labour is required. He cannot send his labour to a particular place. Wherever the labourer goes, the labour also goes with him. Labour can be used by its owner.
Q. 10. An individual has ₹ 5000 as his monthly income. He spends ₹ 4000 on the purchase of goods and services to satisfy him and his family’s needs every month. In this way he saves ₹ 1000 every month. He keeps his saving idle in his house every month. Will his savings be termed as capital formation? Give reason in support of your answer.
Ans. His savings will not be termed as capital formation because savings has been kept idle. They would have been termed as capital formation if they had been deposited into bank or invested in the purchase of land, machines etc.
