EXERCISE

GIVE VERY SHORT ANSWER

Q1. The word ‘economics’ has been derived from the word of which language?
Answer: The word ‘economics’ has been derived from the Greek word ‘Oikonomia’.

Q2. The word ‘economics’ has been derived from which word?
Answer: The word ‘economics’ has been derived from the Greek word ‘Oikonomia’.

Q3. Who is the father of economics?
Answer: Adam Smith is considered the father of economics.

Q4. Who has given the wealth-based definition of economics?
Answer: Adam Smith gave the wealth-based definition of economics.

Q5. Who has given the welfare – based definition of economics?
Answer: Alfred Marshall gave the welfare-based definition of economics.

Q6. Who has given the scarcity definition of economics?
Answer: Lionel Robbins gave the scarcity definition of economics.

Q7. In which book and when did Adam Smith give his definition of economics?
Answer: Adam Smith gave his definition of economics in his book An Enquiry into the Nature and Causes of the Wealth of Nations in 1776.

Q8. In which book and when did Alfred Marshall give his definition of economics?
Answer: Alfred Marshall gave his definition of economics in his book Principles of Economics in 1890.

Q9. In which book and when did Lionel Robbins give his definition of economics?
Answer: Lionel Robbins gave his definition of economics in his book An Essay on the Nature and Significance of Economic Science in 1932.

Q10. Who said that the definition of economics given by Adam Smith is the ‘Gospel of Mammon’?
Answer: The definition of economics given by Adam Smith was criticized by social scientists like Carlyle and Ruskin as being the ‘Gospel of Mammon’.

Q11. Who offered the definition of economics based on efficiency?
Answer: Samuelson and Nordhaus offered the definition of economics based on efficiency.

Q12. What is the power of a commodity to satisfy human wants called?
Answer: The power of a commodity to satisfy human wants is called utility.

Q13. What are the produced means of production called?
Answer: The produced means of production are called capital.

Q14. The words ‘micro’ and ‘macro’ have been derived from which words?
Answer: The word ‘micro’ is derived from the Greek word Mikros (small), and the word ‘macro’ is derived from the Greek word Makros (large).

GIVE SHORT ANSWER

Q1. Write the definition of economics given by Adam Smith.
Answer: According to Adam Smith, “Economics is the science of wealth.”

Q2. Write the definition of economics given by Marshall.
Answer: According to Alfred Marshall, “Economics is the study of mankind in the ordinary business of life.” He further explained that it examines the part of individual and social action most closely connected with the attainment and use of material requisites for well-being.

Q3. Write the definition of economics given by Robbins.
Answer: According to Lionel Robbins, “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

Q4. Write the definition of economics given by Samuelson and Nordhaus.
Answer: According to Samuelson and Nordhaus, “Accepting the reality of the existence of scarcity, the efficient use of resources by the society to produce valuable commodities, form the subject matter of economics.”

Q5. What are the basic concepts of the definition of economics given by Robbins?
Answer: The basic concepts of Lionel Robbins’ definition are:

1. Human wants are unlimited.
2. Resources to satisfy human wants are limited (scarce).
3. Scarce resources have alternative uses.

Q6. What is Micro economics?
Answer: Microeconomics is a method of economic analysis that studies the economic behavior of individuals or individual organizations. For example, it includes the study of a single consumer, a single producer, a specific market, etc.

Q7. What is Macro economics?
Answer: Macroeconomics is a method of economic analysis that discusses the economic behavior of an entire country or the aggregate behavior of all consumers, producers, and other economic agents. For example, it includes the study of a country’s population, employment, and industrialization.

Q8. Show the differences between free goods and economic goods.
Answer: Free goods are those goods which are available in abundance as free gifts of nature, and hence they do not carry any price. Examples include sunlight, air, wind, and rain. On the other hand, economic goods are scarce in supply compared to their demand, and therefore, they have a price. Such goods require human effort and resources for their production. Examples include food, clothes, electricity, and vehicles. Thus, while free goods are unlimited and free of cost, economic goods are limited and have to be purchased..

Q9. What is National Income?
Answer: National Income is the money value of all goods and services produced in a country within a financial year.

Q10. What is Per Capita Income?
Answer: Per Capita Income is the average income of a person in a country. It is calculated by dividing the total national income by the total population of the country.
Per capita income = National income ÷ Population of the country

GIVE LONG ANSWERS

Q1. Explain with examples, the importance of the study of economics.
Answer: The study of economics is necessary for several reasons:

1. Civic Consciousness: Economics helps citizens know how the government collects and spends money, making them more responsible.
2. Social Problems: It explains economic causes of issues like poverty and unemployment, helping in finding solutions.
3. Price Awareness: It makes consumers aware of price changes and their reasons.
4. Global Issues: It helps us understand globalization, development, and environmental problems.

Q2. Which definition of economics is the most acceptable and why? Explain.
Answer: The definition of economics given by Lionel Robbins is considered the most acceptable. In his book, An Essay on the Nature and Significance of Economic Science, he defined economics as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.

This definition is highly accepted because it is based on three fundamental concepts that form the core of economic problems:

1. Unlimited Wants: Human wants are endless and cannot be fully satisfied.
2. Scarce Resources: Resources to satisfy wants are limited.
3. Alternative Uses: These limited resources can be used in different ways.

Thus, economics studies how people make choices to satisfy unlimited wants with scarce resources.

Q3. Write about the scope of economics.
Answer:

The scope of economics covers activities related to wealth and welfare. Main areas are:

1. Consumption: Study of satisfying human wants, laws of consumption, consumer equilibrium.
2. Production: Creation of goods and services; factors of production; laws of production; producer equilibrium.
3. Distribution: How goods and services are distributed among people.
4. Exchange: Exchange of goods/services through internal and international trade.
5. Money: Role, functions, and types of money that ease exchange.
6. Income: Per capita and national income, their production, distribution, and impact on welfare.
7. Public Finance: Public revenue, expenditure, and debt.
8. Welfare Economics: Welfare aspects of economic activities.
9. Economics of Environment: Balancing environment with development.
10. Efficiency: Best use of scarce resources to increase welfare.

The scope of economics is dynamic, expanding to areas like global economics and sustainable development.