MEANING AND IMPORTANCE OF ECONOMICS
1. Fill in the blanks with suitable words:
1. The word 'Economics' originates from the Greek root ___________ words and __________
2. Kautilya who was in the Mauryan court, wrote the book __________
3. The quality of the goods and services which can satisfy man's wants is called _____________
4. The physical and intellectual work that is done in return for money is called __________
5. The manufactured goods that are used in the production process are called _________
Ans: (1) 'okos', 'nomos' (2) Arthashastra (3) Utility (4) labour
(5) physical capital
II. Answer the following in a sentence each:
1. What is Economics?
Ans: Economics is a subject which studies daily economic activities of man.
1. Who is identified as the Father of Economics'?
Ans: Adam Smith is identified as the 'Father of Economics'.
3. What are Economic Activities?
Ans: All the activities that man engages in to earn money and to utilize money are called economic activities.
4. A student buys a pen and writes with it. What kind of
economic activity is this?
5. What is 'Production'?
Ans: Man has learnt to utilize the natural resources and produce whatever goods he wants. This process is called 'Production'.
III. Answer the following in three or four sentences each:
1. What are man's economic activities?
Ans: Man makes use of his skills and labours to earn money and satisfies his wants by utilizing that money. In order to earn money and wealth, and thereby satisfy his wants, man engages himself in various activities. These activities are called economic activities.
2. Why do we need to study Economics?
Ans: We need to study Economics because of the following important aspects-
a) It helps to understand and solve problems of poverty, unemployment, economic inequality, etc.,
b) It helps to solve the problem of what to produce, how to produce, whom to produce, etc.,
c) Economics identifies the reason for the rise and fall of prices and the results of such fluctuations.
d) Economics suggests ways to make use of limited resources with care and efficiency.
3. How has the meaning of Economics changed from time
Ans: The subject matter of Economics has been changing from time to time. Earlier it meant as 'house hold management' Over the years the scope of economics has widened to national and international levels. Today economics deals with the activities such as production, consumption, exchange and distribution, etc.
4. What is meant by 'Factors of Production’? What are they?
Ans: The inputs needed to produce goods and services are - called Factors of production. There are four factors of production. They are 1) Land 2) Labour 3) Physical Capital and 4) Human Capital.