NIOS Free Solved Assignments (2020 - 2021) | ECONOMICS 214| ENGLISH MEDIUM TMA SECONDARY

ECONOMICS (214)
SECONDARY
Tutor Marked Assignment
Max. Marks: 20

Note:

(i) All questions are compulsory. The marks allotted for each question are given beside the questions.

(ii) Write your name enrollment numbers, AI name, and subject on the top of the first page of the answer sheet.

1. Answer any one of the following questions in about 40-60 words.                      2

(a) "Economics is a science of scarcity and choice". Explain. (See Lesson 1)

Ans: We know that, resources available with every individual or society are scarce, so people try to achieve their goals by alternative use of these resources which they do by making appropriate choice. So economics was treated as science of scarcity and choice. As science of scarcity and choice, economics studies human behavior as relationship between ends and means which are scarce and have alternative uses.

(b) Illustrate the difference between economic and non-economic with examples. (See Lesson 2)

Ans: Human wants are unlimited. They differ from person to person. Human wants are satisfied by using certain goods, and services. These goods and services are purchased from the market by paying a price. The wants that can be satisfied by such goods and services are called economic wants.

A few things that we want are not purchased from the market by paying a price. Such wants are called non-economic wants. For example, we want air to breathe, rain water for agriculture etc. When we want a maid to cook, it is our economic want. But if the food is cooked by mother, it becomes non-economic want.

2. Answer any one out of the following questions in about 40 to 60 words.                         2

(a) An economy is a framework where all economic activities are carried out. Explain how? (See Lesson 4)

Ans: An economy is a man-made organization for the satisfaction of human wants. According to A.J. Brown, “An economy is a system by which people get living”. The way man attempts to get a living differs in major respects from time to time and from place to place. In primitive times ‘get a living’ was simple but with growth of civilization it has become much more complex. Here it is important to note that the way person earns his/her living must be legal and fair. Unfair and illegal means such as robbery, smuggling may earn income for oneself but should not be taken into consideration as gainful economic activity or a system of ‘get a living’. It will therefore be appropriate to call that economy is a framework where all economic activities are carried out.

(b) Distinguish between labour intensive technology and capital intensive technology. (See Lesson 7)

Ans: Labour Intensive Technology: When we make more use of labour and less use of capital per unit of output in the production of our commodity that is called labour intensive technology. This type of technology is used in household enterprises and in the enterprises which make production for self consumption or in case of small scale production.

Capital Intensive Technology: When we make more use of capital and less use of labour per unit output in the production of our commodity that is called capital intensive technology of production. This type of technology is used when the production is made on a large scale for sale in the market in order to earn profit.

3. Answer any one out of the following questions in about 40 to 60 words.                         2

(a) Do you agree that if the scarce resources are not utilized fully, it is wastage of resources? Comment. (See Lesson 5)

Ans: One of the main central problems of economy is that the full utilisation of resources- land, labour, capital. If all the resources in the economy are fully employed, then the quantity of one commodity can be increased only by forgoing some quantity of the other. This happens when production takes place efficiently. But in reality, the factors of production are not fully employed and the production is below the optimum capacity of economy. This is not a good sign, as the resources are already scarce. If these scarce resources are also not utilized fully, it is wastage of resources. Thus it is the duty of an economy to ensure that the scarce resources do not remain unutilized or under-utilised.

(b) Goods and services play an important role in an economy. Explain. (See Lesson 3)

Ans: Goods and services have a multidimensional role to play in an economy which is listed below:

1. Human wants: Human wants are unlimited and they are also ever increasing. It means if the availability of different goods and services like clothes, shoes, furniture, utensils, television, and services of doctor, plumber, electrician etc increases, it will satisfy more human wants.

2. Production: We require consumer goods and services to satisfy increasing human wants. But this increase in availability of consumer goods and services depends on the increased availability of producer goods and services. We can produce more if we have more and better machinery, raw material, tractors, seeds, manure etc. similarly we require more of transportation services, banking and insurance services.

3. Investment: Increase in the production of goods and services will also determine the level of investment. If the production of goods and services is more, it is likely that the consumption will be more and the investment will also be more. The larger is the surplus, the larger is the productive capacity of the economy.

4. Answer any one out of the following questions in about 100 to 150 words.                     4

(a) How does positive economics differ from normative economics? Explain with illustrations. (See Lesson 1)

Ans: Difference between positive economics and normative economics:

A. Economics as a positive science:	B. Economics as a Normative Science:
1. The positive science explains “what it is” but not “what ought to be” 2. It explains about the things as they are. 3. It does not deal with value judgments. 4. According to Lionel Robbins economics is a Positive science.	1. A normative science explains what ought to be and what not ought to be. 2. It does relates to value judgments 3. It deals with good & bad (or) right and wrong. 4. According to Alfred Marshall economics is a normative science.

(b) Sahil wants to become an entrepreneur. What functions does he need to perform as an entrepreneur? (See Lesson 6)

Ans: In order to start a new venture, one must take the initiative to start the process of production of goods or services by bringing land, labour and capital together in right proportion. He will be responsible for choosing the right type of land, labour and capital and take important decisions with respect to quantity to be produced, money to be spent to buy the factors and raw materials, marketing the output produced etc.  The person who makes the decisions and controls the production process and bears the risks and uncertainties involved in production is called an entrepreneur.

He/She should be knowledgeable, courageous and should possess leadership qualities. The objective of an entrepreneur is to get maximum production by using the given resources and make arrangements for the sale of the finished products. He/she is also responsible to make payments to other factors of production.

5. Answer any one out of the following questions in about 100 to 150 words.     4

(a) State and explain the law of demand with the help of a hypothetical numerical example/ schedule. (See Lesson 9)

Ans: Law of Demand: The law of demand states that “Other things remains constant” when the price of the commodity falls, demand increases and vice-versa. That means there is an inverse relationship between price of the commodity and its quantity.

The law of demand is explained with the help of an individual demand schedule.

Individual Demand Schedule

Price of orange (Per unit) Rs.	Quantity of orange (Per unit)
2 4 6 8	10 8 6 4

From the above schedule it is shown that when the price of orange increases then the demand for orange decreases and it increases when its price decreases. This schedule is explained below with a diagram.

In the diagram, OX-axis represents quantity of orange and OY-axis represents price of orange. When the price of orange is Rs. 8 then, the consumer will willing to purchase only 4 unit of oranges. But when the price of oranges falls to Rs. 2 then the demand of the consumer for oranges will go up to 10. If various points like A, B, C and D join together then the consumer gets a downward slopping curve which is the demand curve for the consumer. This curve is negatively sloped as there is an inverse relationship between price and quantity.

 (b) Explain the central problem of an economy with the help of an example. (See Lesson 5)

Ans: The resources required to satisfy unlimited wants are limited in supply, it has created economic problems in the society. The central problems of an economy which is based on scarcity of resources are as follows:

(a)    What to produce?

(b)   How to produce? And

(c)    For whom to produce?

a)      What to produce: That means the economy or firm has to decide what type of goods are produced whether it is consumption goods or capital goods etc.

b)      How to produce: Another central problem of an economy arises for what method is used for production, whether it is labour based or capital based.

c)       For whom it is produced: Distribution of produced goods among the different classes of the society is one of the central problems of an economy.

 6. Prepare any one project out of the following projects given below                    6

(a) Make a list of consumer and producer goods and try to explain how consumer goods differ from producer goods on the basis of usage. (See Lesson 3)

Ans: Consumer goods are those goods which are consumed by the consumer or to satisfy their wants directly. For Example – TV, shirt, pen, clothing, food, jewellery etc.

Producers goods are those which are raw material in nature and used in production of consumer goods. For example – Plastic for TV, Cotton for shirt, Ink – plastic – steel for pen, machines etc.

The main differences between consumer goods and capital goods are as follows:

Consumer Goods	Capital Goods
These goods are used by their ultimate consumers.	These are final goods used by the producers in the production process.
These goods directly satisfy human wants. Thus they have direct demand.	These goods indirectly satisfy human wants. Thus they have derived demand.
These goods may be consumer durables (i.e. TV set, car), Semi-durables like clothing and single use goods such as milk, good etc.	Capital goods are the producer durables of high value.
The wear and tear of consumer durables, when put in use, is not taken into account while measuring national income.	These goods undergo wear and tear and hence are gradually replaced over time. Their cost of wear and tear is deducted to arrive at net national income.

 

(b) Calculate marginal product and average product with the help of the following table. (See Lesson 7)

Units of Labour	Total Product	Marginal Product	Average Product
0 1 2 3 4 5	10 15 20 27 36 40	0 5 5 7 9 4	0 15 10 9 9 8