ADDITIONAL QUESTIONS :
Answer the following questions :
1. What are the three basic questions all Economics systems have ?
Ans: All Economic systems have three basic questions to ask they are :
i) What to produce ?
ii) How to produce ?
iii) For whom to produce ?
2. What are the different features of Capitalism ?
Ans: The different features of Capitalism are :
i) Private Property
ii) Price Mechanism
iii) Sovernity of that Consumer
iv) Profit Motive
v) No Government Interference
vi) Democratic
vii) Self Interest .
3. What does the study of Economic systems include ?
Ans: The study of the Economic systems includes how these various agencies and institutions are linked to one another, how information flows between them and the social relations within the systems which include property rights and the structure of management .
4. What are the features of Socialism .
Ans: The features of Socialism are :
i) Collective Ownership
ii) Economical, Social & Political Equality
iii) Economic Planning
iv) No Competition
v) Positive Role of Government
vi) Maximum Social Welfare
vii) Work & Wages according to Ability & Needs .
5. What are the features of mixed economy .
Ans: The features of mixed economy are :
i) Control Price
ii) Profit Motive
iii) Social Welfare
iv) Control of Monopoly Power
v) Co-existence of Private & Public sector
vi) Personal Freedom
vii) Private Property
viii) Economic Planning
ix) Price Mechanism .
6. What are the questions that must be considered when the problem is “what to produce” .
Ans: To produce more of capital goods or consumer goods. To produce industrial goods or agricultural goods, or to spend on education or health. If both then how much of allocation for each should be considered .
7. What does the question “how to produce’ deal with .
Ans: The question ‘how to produce’ deals with the techniques of production. It can either be labour intensive or capital intensive .
8. What does the question “for whom will you produce” deal with ?
Ans: It deals with distributing goods that have been produced, focusing on efficiency and equity .
9. Explain briefly the problems that arise in :
i) Allocation of resources
ii) Full utilisation of resources
Ans:
i) Allocation of resources: Such problems arises due to scarcity of resources and refers to the question of which wants should be satisfied and which should be left unsatisfied. In other words, what to produce and how much to produce. More production of commodity impose more resources required for the reduction of that commodity and resources are limited .
ii) Full utilisation of resources: In view of limited resources the question of whether all available resources are fully utilized, is an important one. A community should achieve maximum satisfaction by using them inefficiently .
10. What is Economic growth .
Ans: If the productive capacity grows, an economy can produce progressively more goods, which increases the standard of living. The increase in productive capacity of an economy is called ‘Economic growth’ .
Draw the Tree diagram to show:
a) Features of capitalism :
b) Features of socialism :
(c) Features of mixed economy :
Fill in the blanks :
1. The Economic system in which profit is the main motive and resources are owned privately is Capitalism .
2. No Government interference is one of the features of Capitalism in the Economic system .
3. The Economic system in which social welfare is the main motive is Socialism .
4. Mixed Economy is the co-existence of capitalism and socialism .
5. The problem of rational management of resources is called economic problem .
6. How to produce deals with the technique of production. It can either be Labour or Capital incentive .
7. A community should achieve maximum satisfaction by using the Limited resources in the best possible way .
8. The increase in productive capacity of an Economy is called Economic growth .