TEXT QUESTIONS :
1. Match with the pairs :
i) Economics system Features
1) Capitalism b) Dominance of Government .
2) Mixed Economy c) Free Market Economy .
3) Socialism d) Presence of Public and Private Sector .
Ans: 1) b) 2) c) 3) a) .
ii) Economic system Features
I. What to produce? A. Distribution of goods
II . How to produce? B. Allocation of Resources
III. For whom to produce? C. Choice of techniques of production
Ans: I. (B) II. (C) III. (A) .
2. Answer the following question briefly :
1) Name the three Economic systems .
Ans: The three types of Economic systems are :
i) Capitalism .
ii) Socialism .
iii) Mixed Economy .
2) What is Economics system ?
Ans: An Economic system is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of various institutions, agencies, decision making processes etc that comprise the economic structure of a given community .
3) What is Capitalism ?
Ans: It is that economic system in which the profit is the main motive and resources are owned privately. Goods are produced which are in demand and are distributed among the people not on the basis of what the need but on the basis of what people can afford or are willing to purchase .
4) What is Socialism ?
Ans: It is that system in which resources are owned by the Government and social welfare is the main motive. The Government decides what goods are to be produced in accordance with the needs of the country and distribution is supposed to be based on what people need .
5) What is Mixed Economy ?
Ans: It is the coexistence of capitalism and socialism. It is an Economic system that combines one of three characteristics :
(i) Public and private ownership of Industry .
(ii) Market based allocation with economic planning .
(iii) Free market with state interventions .
6) What is an Economics problem ?
Ans: It is the problem of rational management of resources or the problem of optimum utilization of resources. It arises because resources are scarce and resources have alternative uses .
7) Name the three parts of Economic problems .
Ans: The three parts of the Economic problem are :
i) Problem of allocation of resources .
ii) Problem of full utilization of resources .
iii) Problem of economic growth .