ADDITIONAL QUESTIONS :
Answer the following questions :
1. What is need. Give one example .
Ans: ‘Need’ is something that one should always have, something without which one cannot live.
Eg: food, clothing and shelter .
2. What is want. Give one example .
Ans: ‘Want’ is a goods or service that is not essential for living. We may desire or wish to have them to satisfy ourselves. Eg: Eating out, designer clothes and accessories .
3. What are the following goods? Give one example of each .
i) Consumer goods ii) Capital (producer) goods
iii) Private goods iv) Public (social) goods.
Ans:
i) Consumer goods: Goods which are directly used for final consumption purpose.
Eg: food, clothes etc .
ii) Capital (producer) goods: Goods which are used not for direct consumption but for producing other consumer goods. Such goods are also called as intermediate goods.
Eg : Machines and Tools etc .
iii) Private goods: These goods are sold to the public by private firms and companies. They gain a profit from their sale and consumers have to pay a price for it.
Eg: Car, Book, Pen etc .
iv) Public goods or social goods: These goods are offered to the public by the government free of cost. They are enjoyed by all sectors of the society .
Eg: Public Park, Infrastructure etc .
4. What do you mean by services? Explain briefly .
Ans: Services are actions that are performed for someone else, such as medical check-ups, food delivery, car repair, teaching etc. They are intangible in nature which cannot be touched or seen .
5. What gives rise to the need to perform various human activities .
Ans: Our needs and wants can be satisfied by purchasing the particular goods or service, for which we have to earn an income in the first place to spend it. This gives rise to the need to perform various human activities .
6. What are the different types of human activities. Explain each briefly .
Ans: All human activities are basically divided into Economic activities and Non-Economic activities .
i) Economic activities: are those which are undertaken with an intention to earn an income by rendering services to others .
Eg: Teacher teaching in a school .
ii) Non–Economic activities: are those which are not undertaken with an intention to earn income but out of love, respect, charity, etc .
Eg: Mother teaching a child at home .
7. How did the word ‘economics’ originate .
Ans: The term Economics has its origin from two Greek words namely “Oikos” which means Household and “Noos” which means Management. This is because economics is all about how people earn income and how they spend it on their necessities, comforts and luxuries .
8. Give any two definitions of Economics as defined by Economists .
Ans: According to Prof. Adam Smith – father of Economics, “ Economics is a science which inquires into the nature and cause of the wealth of nations” .
-According to Prof. Lionell Robbins, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses” .
9. What is the modern definition of Economics .
Ans: Economics is a study of choice making by individuals, institutions, societies, nations and globe under conditions of scarcity and surplus towards maximising benefits satisfying their unlimited needs at present and future .
10. What is Economic problem. Explain briefly .
Ans: Economic problem means the problem of making a choice between unlimited wants and limited means due to scarcity of resources. Human ‘Wants’ are unlimited, so we need varieties of goods and services to satisfy all these wants. But, the fact is that we have limited resources which are called ‘means’ and these means are always scarce in nature. Here, arises the need to make a choice between unlimited wants and limited resources. This is known as Economic problem .
11. Who is a consumer .
Ans: An individual who buys various goods and services to satisfy his or her wants .
12. What is consumption .
Ans: Consumption is an activity of a consumer which is concerned with the use of various goods and services to satisfy his wants .
13. Who is a producer .
Ans: An individual who is involved with the activity of producing any goods .
Eg. A farmer or a manufacturer .
14. What do you mean by production .
Ans: Production is an act of a producer to produce various goods and services, which is concerned with creating utility to satisfy consumer wants .
15. What is utility .
Ans: The capacity of a commodity to satisfy human wants is known as utility .
16. What do you mean by exchange ?
Ans: An act of buying and selling goods and services is known as exchange .
17. What are the factors of production .
Ans: The term used for the resources of society which are used in the process of production like Land, Labour, Capital and Entrepreneurship .
18. What is investment and Savings .
Ans:
i) Investment is the purchase of goods that are not consumed today but are used in the future to create wealth .
ii) Savings is excess of Income over the Expenditure .
19. What is Micro Economics and Macro Economics .
Ans:
i) Micro Economics − is one of the main branch of Economics which studies the economic activities of individual units . (Eg: Study of demand theory, Production theory, consumer behaviour etc) .
ii) Macro Economics − is the other main branch of Economics which is the study of aggregates at the level of Economy as a whole. (Eg: Study of national income, Employment, General price level etc) .
Fill in the blanks :
1. Goods which are directly used for final consumption purposes are called Consumer goods .
2. Of all the activities economic activities are responsible for the origin of Economics .
3. “Economics is the study of mankind in the ordinary business of life” was quoted by Prof. Alfred Marshall .
4. “Economics is a social science concerned with the way society chooses to employ its resources” is quoted by Prof P.A Samuelson .
5. Prof. Adam Smith is called as the father of Economics .