Q1.
What does economics deal with?
Answer: Economics studies
how individuals, businesses, and governments use limited resources efficiently
to satisfy unlimited wants. It also explains production, distribution,
consumption, prices, and decision-making.
Q2.
What are needs and wants? Give examples.
Answer:
- Needs
are essential things required for survival, such as food, water, and
shelter.
- Wants
are things that make life more comfortable, such as gadgets, vacations,
and luxury items. Human wants are unlimited and keep changing.
Q3.
Why do we have to make choices?
Answer: We have to make
choices because resources are limited while human wants are unlimited.
Therefore, it is not possible to satisfy all wants at the same time.
Q4.
What are resources?
Answer: Resources are
factors used for the production of goods and services. They include natural
resources like land and water, and human-made resources like capital and
technology.
Q5.
What is opportunity cost?
Answer: Opportunity cost is
the value of the next best alternative that is given up when one choice is made
over another.
Q6.
What is the Production Possibility Curve (PPC)?
Answer: The Production
Possibility Curve (PPC) shows the different combinations of goods that can be
produced using all available resources efficiently. It also shows the trade-off
between producing different goods.
Q7.
What does the PPC show?
Answer: The PPC shows:
- Efficient
use of resources
- Maximum
possible production
- Trade-off
between two goods
- Opportunity
cost of producing one good instead of another
Q8.
What are economic entities?
Answer: Economic entities
are participants in economic activities, such as consumers, producers,
enterprises, governments, and financial institutions.
Q9.
Why are data and analysis important in economics?
Answer: Data and analysis
help individuals, businesses, and governments make informed decisions instead
of relying on guesswork. They help understand risks, opportunities, and future
outcomes.
Q10.
What is the Economic Survey of India?
Answer: The Economic Survey
is an annual report prepared by the Ministry of Finance before the Union
Budget. It reviews the country's economic performance and helps policymakers
make important decisions.
Q11.
What are the three key questions in economics?
Answer: The three key
questions are:
1. What to Produce? – Decide which goods
and services should be produced.
2. How to Produce? – Decide whether to
use more labour or more machines.
3. For Whom to Produce? – Decide who will
receive the goods and services according to needs and purchasing power.
Q12.
What are the factors of production?
Answer: The four factors of
production are:
- Land
- Labour
- Capital
- Technology
Q13.
What is labour-intensive production?
Answer: Labour-intensive
production uses more workers and fewer machines. It is common in agriculture
and handicrafts.
Q14.
What is capital-intensive production?
Answer: Capital-intensive
production uses more machines and technology and fewer workers. It is common in
industries like steel and automobile manufacturing.
Q15.
What factors influence the choice of production technique?
Answer: The choice depends
on:
- Cost
of capital
- Availability
of labour
- Technology
- Nature
of the product
- Government
laws and regulations
Q16.
What is an economic system?
Answer: An economic system
is the method by which a country organizes the production, distribution, and
consumption of goods and services and allocates its resources.
Q17.
What is a planned economy?
Answer: A planned economy is
an economic system in which the government controls major economic decisions,
including production, prices, and distribution of goods and services.
Q18.
What is a market economy?
Answer: A market economy is
an economic system where demand and supply determine production and prices,
with limited government intervention.
Q19.
What is a mixed economy? Explain the features of a Mixed Economy.
Answer: A mixed economy
combines features of both planned and market economies. Both the government and
the private sector play important roles in economic activities.
ü Government and
private sector both work together.
ü Private ownership is
allowed.
ü Government regulates
businesses.
ü Public and private
sectors coexist.
ü India follows a mixed
economy.
Q20.
What are public goods?
Answer: Public goods are
goods and services that are available to everyone without excluding anyone,
such as roads, parks, police services, street lights, and basic education.
Q21.
How did India's economy change after 1991?
Answer: In 1991, India
introduced economic reforms that reduced government control, encouraged private
enterprise, promoted global trade and investment, and gradually moved towards a
mixed economy.
Q22.
What are the main points of the chapter?
Answer:
- Economics
studies choices under scarcity.
- Resources
are limited, but wants are unlimited.
- Every
choice has an opportunity cost.
- Every
economy answers three basic questions: What to produce, How to produce,
and For whom to produce.
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