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NIOS Class 10 Economics Chapter 7 Production
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Production
Chapter: 7
MODULE 3: PRODUCING GOODS AND SERVICES
TEXTBOOK QUESTIONS (SOLVED)
INTEXT QUESTIONS 7.1
Q.1. Define inputs.
Ans. Inputs may be defined as the resources which are used in the production.
Q.2. Define output.
Ans. The and services produced by using inputs are called output.
Q.3. Define production function.
Ans. Production function is determined as the technical relationship between inputs and output of a firm.
INTEXT QUESTIONS 7.2
Q.1. Define labour-intensive technology.
Ans. More use of labour and less use of capital per unit of output in the production of a commodity is called labour-intensive technology.
Q.2. Define capital-intensive technology.
Ans. More use of capital and less use of labour in production of a commodity is called capital-intensive technique of production.
Q. 3. Give one example each of product based and process-based division of labour.
Ans. (i) Product-based Division of Labour: Pot making.
(ii) Process-based Division of Labour: Bread manufacturing.
INTEXT QUESTIONS 7.3
Q.1. Define marginal product.
Ans. Marginal productivity may be defined as increase or decrease in total product resulted due to change in one unit of labour, keeping all other inputs unchanged.
Q.2. Calculate MP and AP with the help of following table:
Ans.
INTEXT QUESTIONS 7.4
Q.1. State the law of diminishing marginal product?
Ans. According to the law of diminishing marginal product with continuous increase in variable factor, marginal product will increase initially, till certain point is reached, but after that it will decrease and may become negative, keeping all other factors unchanged.
Q.2. What is the level of total product when marginal product is minimum?
Ans. Total product is maximum.
Q.3. When the producer should stop employing more labour?
Ans. When marginal product becomes negative.
INTEXT QUESTIONS 7.5
Q.1. Define production process.
Ans. The process of procuring inputs, utilising their services and producing goods and services is called production process.
Q.2. Who organises the productive activity?
Ans. Entrepreneur.
INTEXT QUESTIONS 7.6
Q.1. What is a firm?
Ans. A firm is any individual production unit of a commodity.
Q.2. Give the meaning of industry.
Ans. Industry is a group of all the firms making production of an identical commodity.
INTEXT QUESTIONS 7.7
Tick mark (✓) the correct answer:
Q.1. A production unit owned by a single individual is known as
(a) A partnership.
(b) A private company.
(c) Sole proprietorship.
(d) A public production.
Ans. (c) Sole proprietorship.
Q. 2. In a partnership the maximum number of partners is
(a) 5
(b) 10
(c) 15
(d) 20
Ans. (d) 20
Q.3. Indian Railways is a
(a) Private Unit.
(b) Public Unit.
(c) Sole Proprietorship.
(d) Partnership.
Ans. (b) Public Unit.
Q.4. Minimum number of members in a cooperative society is
(a) 20
(b) 13
(c) 10
(d) 5
Ans. (c) 10
Q.5. Maximum number of share-holders in a public company is
(a) 10,000
(b) 15,000
(c) 20,000
(d) No limit
Ans. (d) No limit.
Q.6. A Govt. production unit registered under Companies Act, 1956 is a
(a) A Statutory Corporation.
(b) Government Company.
(c) Departmental Enterprise.
(d) None of these.
Ans. (b) Government Company.
Q.7. The minimum number of owners in a private company is
(a) 7
(b) 10
(c) 2
(d) 20
Ans. (c) 2
Q.8. In which situation a production unit is not considered as a foreign production unit?
(a) Entire capital is invested by non- resident.
(b) More than 50% of the total capital is invested by non-residents.
(c) Residents have more than 50% of the total product.
(d) Less than 20% of the investment is made by residents.
Ans. (c) Residents have more than 50% of the total product.
TERMINAL EXERCISE
Q.1. Define Production Process.
Ans. Production process may be defined as the process of combining inputs, utilising their services and making production of goods and services.
Q.2. How does an entrepreneur organise a product unit?
Ans. An entrepreneur organise a product unit by continuing the various factors of production in right proportion.
Q.3. Distinguish between labour- intensive and capital-intensive technology of production.
Ans. Capital-intensive Method: Capital intensive technology of production is that technology of production in which we make more use of capital and less use of labour per unit of output in the production of our commodity.
Labour-intensive Method: When a production unit uses more labour, capital per unit of output then it is called labour, intensive method of production. For example, basket, rope, and mats making, canning of chairs, wood carving, embroidery works etc. involve more use of labour and less of capital. This method of production used in making these things is called labour-intensive.
Q.4. Distinguish between product- based and process-based division of labour.
Ans. In product-based division of labour, a worker specialises in the production of a single good or service. This type of division of labour is used in case of small farmers, a potter, a cobbler or a carpenter in a village. It is also used in the production for self- consumption or on a small scale.
On the other hand, process-based division of labour is used in big production units like corporations and government enterprises where production is made on a very large scale. In this type of division of labour, the production of a commodity is divided into many processes and a worker specialises in one or two processes.
Q.5. Distinguish between indigenous induction units and foreign production units.
Ans. Distinction between an indigenous unit and a foreign production unit are as under:
Indigenous Production Unit: The production units located in country and owned by the residents of the country are indigenous production units. Example-Small factory, government offices, ration shops, schools etc.
Foreign Production Unit: The production units owned by non-residents of the country are termed as foreign production unit. In a foreign production unit at least 50 per cent capital is invested by non-residents.
Q.6. Distinguish between private sector and public sector production units.
Ans. Private production units are owned by private persons and institutions whereas public sector units are owned by government. Private production units produce goods and services for sale in the market with the aim of earning profit whereas, public sector production units provide a lot of services such as education, health care, law and order, post and telegraph, transport, telecommunication and broadcasting etc.
Q. 7. Distinguish between sole proprietorship and partnership.
Ans. Sole Proprietorship: A production unit is owned by a single person is termed as a sole proprietorship. He is responsible for the management of the unit and pockets all the profits and bears all the loss by the unit.
Partnership: A production unit owned by two or more persons simultaneously is termed as partnership. In such unit all partners are collectively responsible for the management of the unit. They share the profit and bear the loss in the ratio agreed upon at the time of forming the partnership.
Q.8. Distinguish between a company and a cooperative society.
Ans. Difference between a Company and a Cooperative Society.
| Company | Cooperative Society |
| (i) It is suitable for large, scale business organisations. | (i) It is suitable for small-scale and medium size business. |
| (ii) It is established under Companies Act, 1956. | (ii) It works according to Cooperative Societies Act, 1912. |
| (iii) Formation of a company is the complicated. | (iii) Formation of a cooperative society is easy. |
| (iv) It has unlimited resources. | (iv) It has limited resources. |
Q.9. Distinguish between depart- mental and non-departmental enterprises.
Ans. Departmental Enterprises: Government enterprises which are under the direct control of some government department or ministry are termed as departmental enterprises. Either Parliament or State Legislative Assembly had direct control over their functioning. The minister for the concerned ministry is responsible for the functioning of such an enterprise. Example- Indian Railways, All India Radio, Doordarshan etc.
Non-Departmental Enterprises: Those enterprises whose legal existence is separated from that of government, are termed as non-departmental enterprises. These are autonomous in nature and Parliament or State Legislative Assembly has no direct control over their functioning.
Example: UTI, Indian Airlines, HMT, Indian Telephone Industries Ltd. etc.
Q.10. Distinguish between autono- mous corporation and government companies.
Ans. Difference between Autonomous Corporation and Government Companies: Autonomous corporations are government production units which are supported and funded by the government, but function independently. They are non-departmental enterprises and called public sector undertakings. On the other hand government companies are those government production units which are generally under direct control of the ministry.
Q.11. Distinguish between multinational and collaboration.
Ans. Multinational Firm: A firm which has its main office in one country but has its business activities spread in many other countries is termed as a multinational firm.
Collaboration: It is a foreign production unit operates in a country. In this firm foreign entrepreneurs and domestic entrepreneurs jointly participate in production unit. In such unit to be treated as a collaboration more than 50% of the capital must be invested by non-residents.
Q.12. Distinguish between firm and industry.
Ans. Firm is a production unit which makes production of goods and services for sale in the market in order to earn profit.
On the other hand industry is a group of all the firms making production of similar commodity.
We can differentiate between a firm and a by taking an example. Bata Shoe Company is a firm which makes shoes but the shoe industry includes all the firms producing shoes. So Bata, Action, Liberty, Adidas, Nike, Reebok etc. firm the shoe-industry.
Q.13. Explain the role and importance of firms and industries.
Ans. The Role and Importance of Firms and Industries: The role and importance of firms and industries has been explained below:
(i) Production of Goods and Services for Consumption: The firms and industries produce various types of goods and services for satisfying the human wants. The human satisfies its needs by consuming the goods and services produced by firms and industries.
(ii) Production for investment: They produce goods like machines, plants, transport vehicles (like buses, trucks, railways, ships, aeroplanes etc.) and other various goods for investment.
(iii) Providing Employment: Firms and industries are the sources of employment to people. By employment, people get income for the satisfaction of their wants.
(iv) Provide Infrastructure for the Development of the Country: They provide energy, transport, communication, health, education and housing which is the basic requirement to provide infrastructure for the country. Without the development of infrastructure, the all round development of the country is not possible.
SOME IMPORTANT QUESTIONS FOR EXAMINATIONS
VERY SHORT ANSWER TYPE QUESTIONS
Q.1. What are inputs?
Ans. The resources used in the production are called inputs.
Q.2. What is output?
Ans. The goods and services produced is called output.
Q.3. What inputs are required for the production of rice?
Ans. By the production of rice, we need following inputs:
(i) Agricultural land.
(ii) Seeds.
(iii) Fertilizers.
(iv) Plough.
(v) Water.
(vi) Pesticides.
(vii) Diesel to run a tractors etc.
Q.4. What does production function tells us?
Ans. Production function tells us the technical relationship between inputs and output of a firm.
Q.5. Which is the function of inputs?
Ans. Quality of output is the function of inputs.
Q.6. What type of relation is there between the amount of inputs and the amount of output produced?
Ans. There is a direct relationship between the amount of inputs and the amount of output produced.
Q.7. What is the aim of every producer?
Ans. The aim of every producer is to maximise the quantity of output from the given amount of inputs.
Q.8. What does technology or method of production refer to?
Ans. Technology or method of production refers to the ratio in which inputs are combined to produce output.
Q.9. Define production function.
Ans. Production function is defined as a technical relationship that tell us the maximum output producible from various combination of inputs.
Q.10. A farmer makes use of wooden plough, bullock etc. in the production of food-grains. Which technology of production is used?
Ans. Labour-intensive technology of production.
Q. 11. Raju makes use of tractor, pump-set, harvester in the production of food-grains. Name the type of technology of production used by him.
Ans. Capital-intensive technology of production used by him.
Q.12. What is labour-intensive technique of production?
Ans. Labour-intensive technique of production is that method of production in which more use of labour and less use of capital per unit of output in the production are made.
Q.13. In which enterprises, labour- intensive technique of production is used?
Ans. It is used in the household enterprises and in the enterprises which make production for self-consumption or in small- scale production.
Q.14. What is capital-intensive technique of production?
Ans. Capital-intensive technique of production is that method of production in which we make more use of capital and less use of labour per unit output in the production.
Q.15. When is the capital-intensive technique of production used?
Ans. Capital-intensive technique of production is used when the production is made on the large scale for sale in the market to earn profit.
Q.16. What do you mean by division of labour?
Ans. Division of labour means splitting up of the production activity into many processes and assigning every process among different workers according to their aptitude and ability.
Q.17. State the types of division of labour.
Ans. Division of labour of two types-
(i) Product based division of labour. and
(ii) Process, based division of labour.
Q.18. What is product-based division of labour?
Ans. It is that type of division of labour in which a worker specialises in the production of a single good or service.
Q.19. What is process-based division of labour?
Ans. Process-based division of labour is that type of division of labour in which the production of a commodity is divided into many processes and a worker specialises in one or two processes.
Q.20. On which type of division of labour the supply of any single good or service depends.
Ans. The supply of any single good or service depends on the process-based division of labour.
Q.21. State any two advantages of division of labour.
Ans. (i) Division of labour increases the efficiency of workers.
(ii) It leads to the possibility of invention and discoveries.
Q.22. Write down the three main concepts relating to the production of a commodity.
Ans. (i) Total Product (TP).
(ii) Average Product (AP).
(iii) Marginal Product (MP).
Q.23. What does total product refer to?
Ans. Total product refers to the total quantity of output of a commodity at a particular level of employment of an input say labour, remaining the employment of all other inputs same.
Q.24. What is average product?
Ans. Average product is the output per unit of a variable input, say labour. It is obtained by dividing total product by the number of units of a variable factor. In equation,
Q.25. Define marginal product.
Ans. Marginal product may be defined as increase or decrease in total product resulted due to addition of one extra unit of labour, keeping all other inputs unchanged. In equation,
Q.26. Total product of 5 units of labour is 50 units and total product of 6 units of labour is 54 units. Calculate MP of 6th unit of labour.
Ans. MP of 6th labour = 54 – 50 = 5 units.
Q.27. Total product of 6 units of labour is 54 units. Calculate average product.
Ans:
Q.28. Out of MP and AP, which product may be negative?
Ans. Marginal product may be negative.
Q.29. What does law of diminishing marginal product of labour state?
Ans. Law of diminishing marginal product of labour states that with continuous increase in the variable factor labour, its marginal product will increase initially till certain point is reached, but after that it will decrease and may become negative keeping all other factors unchanged.
Q.30. State any two steps involved in production process.
Ans. Production process involves following steps:
(i) Procuring or arranging the factors of production from the owners of the factors.
(ii) Forming the right combination of factor.
Q.31. What is a firm?
Ans. A firm is an individual production unit which produces goods and services for sale in the market.
Q.32. What is an industry?
Ans. An industry is a group of all the firms making production of a commodity (one type of good).
Q.33. Give an example of a firm.
Ans. Bata Shoe Company.
Q.34. What does agriculture industry supply?
Ans. Agriculture industry supplies food- grains, vegetables, fruits, cotton, pulse, milk and butter etc.
Q.35. Give the classification of the production units on the basis of ownership.
Ans. (i) Indigenous Production Units.
(ii) Foreign Production Units.
Q.36. What are indigenous production units?
Ans. Indigenous production units are those production units which are located in a country and owned by the residents of the country.
Q.37. State the types of indigenous production units.
Ans. (i) Private Production Units.
(ii) Government Production Units.
Q.38. Give the classification of private production units.
Ans. Private production units may be classified into the following categories:
(i) Sole Proprietorship.
(ii) Partnership.
(iii) Company or Corporations.
(iv) Cooperative Society. and
(v) Private Non-profit Organisations.
Q.39. Give two examples of Departmental Enterprises.
Ans. (i) Indian Railways.
(ii) All India Radio and Doordarshan.
Q.40. Give any two examples of Public Sector Undertakings.
Ans. (i) Indian Airlines.
(ii) Hindustan Machine Tools.
Q.41. What are multi-national corporations (MNCs)?
Ans. Multi-national corporations are those firms which have their office in one country, but have their business activities spread in many countries.
Q.42. Give any three examples of MNCs.
Ans. (i) Coca Cola.
(ii) Pepsi Cola.
(iii) Samsung.
Q.43. What are collaboration units?
Ans. Collaboration units are those production units in which foreigners and domestic entrepreneurs participate jointly. They are partly indigenous and partly foreign.
SHORT TYPE QUESTIONS ANSWER
Q.1. When does a farmer make use of labour-intensive technology?
Ans. (i) Use of Labour-intensive Technology: A farmer makes use of labour intensive technology when we uses wood ploughs, bullocks etc. on the production of food-grains.
(ii) Use of Capital-intensive Technology: A farmer makes use of capital- intensive technology when he uses tractors, pumpset, harvester in the production of food- grains.
Q.2. What is division of labour? Write down its merits.
Ans. Division of Labour: Division of labour means splitting up of the productive activity into many process and assigning every process among different workers according to their aptitude, ability, experience, taste. It is of two types-
(i) Product-based division of labour. and
(ii) Process-based division of labour.
Merits of Division of Labour:
(i) It increases the efficiency of workers.
(ii) It makes the large-scale production easy.
(iii) It leads to specialisation.
(iv) It leads to the possibility of inventions and discoveries.
(v) It leads to the use of capital-intensive technology.
Q.3. State the steps involved in the process of manufacturing bread by Britania Bread Company.
Ans. Steps involved in the Production Process of Bread:
(i) Conversion of wheat into dough.
(ii) Keeping the dough into containers for baking.
(iii) Keeping the containers in ovens for baking.
(iv) Cutting of baked bread into small pieces.
(v) Packing the small pieces of bread.
Q.4. State the steps involved in providing street lighting in a newly constructed group housing complex.
Ans. Steps Involved: (i) Installation of electric bulbs in the streets.
(ii) Connecting all the poles with electric wires.
(iii) Fitting electric bulbs and tubes.
(iv) Releasing of electric supply from substations.
Q.5. Calculate APP and MPP of a factor from the following table:
TPP Schedule
Ans.
Q.6. The following table gives the MPP of a factor. It is also known that the TPP at zero level of employment is zero. Determine its TPP and APP schedules.
Ans.
Q.7. Following table gives the AP of a factor of production. It is also known that TP at zero level of employment is zero. Determine TP and MP.
Ans.
Q.8. Study the following table:
(i) Find the average product when 6 units of labour are employed (ii) Marginal product of the 5th labour.
Ans. (i) Average product of the 6th unit of labour 108/6 = 18
(ii) Marginal product of the 5th worker
= TP₃ – TP₄
= 95 – 75 = 20
Q.9. Complete the following table:
Ans.
Q.10. From the following table, marginal physical product and marginal revenue product. Assume that price is Rs. 10 per unit.
Ans.
Q.11. The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
Ans.
Q.12. PRoduct Table
Read the table and state the behaviour of MP with the increase in the units of labour from one onwards.
Ans. (i) MP increases for first 3 units of labour i.e. from 10 at L = 1 to 12 at L = 2 to 14 at L = 3.
(ii) For next 4 units of labour, MP decreases i.e. from 14 at 3 to 8 at L= 4 to 6 at L=5 to 4 at L= 6 to 2 at L = 7 to 0 at L = 8.
(iii) Finally the value of MP becomes negative at L = 9.
Conclusion: It is here concluded that after increasing temporarily for some time, the marginal product of labour eventually decreases.
Q.13. Give the various forms of private sector.
Ans. Various forms of private sector are as follows:
(i) Sole Proprietorship.
(ii) Partnership.
(iii) Company or Corporation.
(iv) Cooperative Society.
(v) Private non-profit organisation.
Q.14. Write down the features of sole proprietorship.
Ans. Features: (i) It is owned by a single individual.
(ii) It can be easily formed and closed.
(iii) It has unlimited liability.
(iv) A sole proprietor bears all types or risks and uncertainties involved in the business.
(v) The owner has the full control over the business.
(vi) In the eyes of law, there is no distinction between the sole trader and his business.
Q.15. Write down the features of partnership.
Ans. Features of Partnership: (i) It is owned by two or more persons:
(ii) It is formed under the Indian Partnership Act, 1932.
(iii) A partnership may have a maximum of 2 members and in case of banking business, maximum of 10 members.
(iv) Owners of partnership are called partners.
(v) All the partners are collectively responsible for the management and working of production unit.
(vi) Profit/loss is distributed among the partners according to the agreement made at the time of forming the partnership.
(vii) All the partners have unlimited liability.
Q.16. Write down any 6 multinational companies along with their business.
Ans.
