Kerala Syllabus STD 8 Social Science: Chapter 04 Basic Economic Problems and the Economy - Questions and Answers | Teaching Manual | Teachers Handbook

Study Notes for Class 8 Social Science (English Medium) അടിസ്ഥാന സാമ്പത്തിക പ്രശ്നങ്ങളും: സമ്പദ്‌വ്യവസ്ഥയും | Text Books Solution Social Science (English Medium) Chapter 04 Basic Economic Problems and the Economy | Teaching Manual & Teachers Handbook 

എട്ടാം ക്ലാസ് Social Science ലെ Unit 4 Basic Economic Problems and the Economy - Complete Questions and Answers. പഠന സഹായികൾ അയക്കാൻ താല്പര്യമുള്ളവർ ഈ നമ്പറിൽ വാട്സാപ്പ് ചെയ്യുക: 9497346250. 

Chapter 04: Basic Economic Problems and the Economy  - Questions and Answers 
∎Std 8 Social Science
♦ List the basic and gratifying needs in our life.
Basic needs Gratifying needs
• Food
• Clothing
• Shelter		• luxury cars
• expensive jewellery
• costly dresses
♦ What are the characteristics of Needs?
• human needs are diverse and innumerable
• some needs can be met alone and others through collective efforts
• a need once fulfilled may be repeated
• needs vary with time, place and individuals
• With human progress, needs also change

♦ What are the three basic economic problems that a country faces in the production process of goods and services?
• What to Produce?
• How to Produce?
• For whom to produce?

♦ What is meant by "what to produce"?
• Each country has to prioritise what to produce using the available resources.
• If the country decides to produce more of any one commodity or service, it will have to limit the resources that can be used to produce other goods.
• The country takes such decisions to achieve a balance between the needs of society and the quantity of products produced in the country.

♦ Look at the given pictures. What difference can be seen in the making of chapati in Figures 4.3 and 4.4 (Textbook Page 62)? 
What factors of production are mostly used here?
i. Figures 4.3 - Chapati is produced as a result of human labour
ii. Figures 4.4 - Chapati is produced using machines. Here, production increases. Human labour is less.

♦ Look at the given pictures. What difference can be seen in the making of chapati in Figures 4.5 and 4.6 (Textbook Page 62)? 
What factors of production are mostly used here?
i. Figures 4.5 - More human labour, traditional tools
ii. Figures 4.6 - Modern harvesting machines are used, less human labous

♦ What do you mean by ’How to produce?’
• How to produce is a problem related to the choice of technologies. 
• What technology to be used depends on the resources available in that region. • There will be a difference in the method of production depending on the availability of resources.

♦ Write the difference between ‘Labour Intensive Technique.’,‘Capital Intensive Technique.’
• The method of production using more labour and less capital is called ‘Labour Intensive Technique.’
• The method of producton using more capital and less labour is called ‘Capital Intensive Technique.’

♦ List out the Characteristics of Labour Intensive Technique
• Production involving more labourers
• Low level of capital utilisation
• Requires more time
• Eco-friendly production method
• Limited use of technology

♦ Write the Characteristics of Capital Intensive Technique
• Intensive Technique
• Less demand for labourers
• Utilises more capital investment
• Ensures productivity
• Depends more on technology
• Less time for production

♦ What is the meaning of for whom to produce?
Production should be done to meet the needs of the people. The goods and services produced are distributed in a way that benefits everyone in the society. 

♦ What are the factors of production? How is the product value to be distributed?
• Land, labour, capital and organisation
• Rent to land, wages to labour, interest to capital, and profit to organisation.
♦ Think and identify (Textbook Page: 65)
i. Members of a Kudumbashree unit decided to start a production unit.  Many opinions arose among the members. What will be the basic issue they have to decide?
Answer: What to produce

ii. At the end of the discussions, it was decided to lease some land and cultivate it.  The right proportion of labourers and machinery to prepare the land for agriculture was discussed. To what basic economic problem does this relate? 
Answer: How to produce

iii. There are families which do not grow vegetables in the area where the Kudumbashree unit works. They also need vegetables. The Kudumbashree unit aims to sell the surplus to those in need. The profit from agriculture has to be distributed among the members. To what basic economic problem does this relate?
Answer: Whom to produce

♦ What is the economy? Write the function of every economy?
• An economy is the way a country organises the production, distribution and consumption of various goods and services. 
• The function of every economy is to satisfy human needs through the use of the available resources.

♦ What are the characteristics of an economy?
• economy is man-made
• economy is subject to change
• economic activities in the economy keep changing
• production, distribution and consumption are the main activities in the economy

♦ How is an economy classified based on the ownership of the factors of production?
• Capitalist Economy
• Socialist Economy
• Mixed Economy

♦ What is a capitalist economy?
It is an economy in which ownership of the factors of production is concentrated in individuals.

♦ What are the features of a capitalist economy? 
• All persons have the right to own property
• Maximum profit
• Limited government intervention
• Individuals can store resource and use it to produce goods and services as they want
• The consumer has complete freedom in the market(consumer sovereignty)
• Competition among industries

♦ What is the role of the government today in countries with a capitalist economy?
Active participation of government in economic development can be seen today in many countries that follow capitalist economy.

♦ What is the fundamental nature of a socialist economy?
• A socialist economy is one in which the government owns and controls all the factors of production.
• A centralised planning committee will take decisions on economic activities.

♦ What are the features of a socialist economy? 
• Ownership of the factors of production is vested in the government
• Social welfare is the main objective
• Government's control over the market
• The central planning committee utilises resources keeping in view the availability of resources and national objectives
• Reducing inequality in income and wealth

♦ What is the main objective socialist economy?
Social welfare is the main objective of a socialist economy

♦ What is a mixed economy?
A mixed economy is one that combines some features of a capitalist economy and a socialist economy.

♦ What are the features of a mixed economy?
• Coexistence of private and public sector
• Main objectives - profitability and social welfare
• profitability and social welfare become the main objectives
• individual freedom in economic activities
• financial planning for preparation of government schemes
• government regulation of commodity prices in certain sectors
• government gives priority to essential goods and services

♦ How are basic economic problems solved in a mixed economy?
Through markets and centralised planning systems
♦ The global economy today is transforming into a knowledge-based economy. What does it mean?
A knowledge economy refers to an economic system in which knowledge and skills are the conductors of growth and innovation. In this economy, knowledge is considered a key resource.  

♦ What is the study of economics about?
Economics is the discipline that deals with human needs, basic economic problems, and different Economies. It also includes budget, banking, market, goods and services.

♦ Who is known as the Father of Economics?
Adam Smith

♦ How was economics known in earlier times, and who was its main proponent? 
In earlier times, economics was known as the science of wealth.  Adam Smith was the main proponent of this.

♦ Let us get to know some economists and the ideas that inspired the development of economics.
i. Adam Smith - Science of Wealth

ii. Alfred Marshall - Science of Welfare

iii. Lionel Robbins - Deals with the relationship between human wants and limited
resources

iv. David Ricardo: 
• ‘Theory of Rent’
• Trade between two countries can increase the welfare of both countries

v. Karl Marx: 
• ‘Theory of Surplus Value.’  
• The basis of production is the labour of the workers.  But only a small portion of this is given to the labourer and the majority is kept by the capitalist.

vi. J. M. Keynes:
• government intervention
• He argued that government intervention is necessary to solve economic problems. 

v. J. A. Schumpeter:
• ‘Creative Destruction.’ 
• Industries and technologies create new opportunities and growth through innovation. But existing industries and technologies are disrupted or destroyed by innovation.

♦ Find out which of the ideas given below are related to the ideas of different economists. (Textbook Page: 70)
• The rise of the smartphone industry led to the decline of the tape recorder, video
player and film camera industries.
Answer: J. A. Schumpeter

• Government intervention is needed to solve economic problems.
Answer: J. M. Keynes

• Trade between two countries can benefit both countries and increase the welfare of the people.
Answer: David Ricardo

• The basis of production is the labour of the workers.
Answer: Karl Marx

♦ What are the contributions of Indian Economists to economics?
• ‘Chanakya - devised an efficient tax system
• ‘Dadabhai Naoroji - The Drain Theory
• ‘Mahatma Gandhi - self-sufficiency and decentralisation. Describes the
economic visions in his books Hind Swaraj and India of My Dreams.
• ‘Amartya Kumar Sen - Welfare Economics
• ‘Abhijit Vinayak Banerjee (Indian-American economist) - experimental approach to global poverty eradication

♦ What were the economic thoughts put forward by Gandhiji?
• Gandhiji envisioned an economy based on self-sufficiency and decentralisation.
• Rural industries need to be nurtured to increase employment opportunities locally.
• Expand local markets for marketing locally produced goods.
• Economic inequality should be alleviated to ensure social justice.
♦ What are Amartya Kumar Sen’s thoughts on Welfare Economics?
• Emphasis should be placed on education, health care and social justice to achieve economic progress.
• Gender equality and women empowerment are essential for the progress of the country.
• Economic development should be evaluated on the basis of its influence on human rights and freedoms.

♦ Who is the first Indian economist to win the Nobel Prize in Economics in 1998?
Amartya Kumar Sen

♦ Who received the Nobel Prize in Economics in 2019, and for what?
• Abhijit Vinayak Banerjee was awarded the 2019 Nobel Prize in Economics for devising an experimental approach to global poverty eradication.
• He shared the Nobel Prize with Esther Duflo and Michael Kremer.

♦ Names of some economists of India and their thoughts are given below. Find the missing ones. (Textbook Page: 71)
A. Gandhiji
B. Welfare economics
C. Abhijit Vinayak Banerjee
D. The Drain Theory


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