Economics 214 | NIOS Secondary Solved Assignment (2021 - 22)

NIOS Free Solved Assignments (2021-22)
Economics (214)
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 first page of the answer sheet.

economics 214 solved assignment 2021 - 22

1. Answer any one of the following questions in about 40-60 words.         2
(a) Economics is a vast subject and it is not easy to give a precise definition of economics. You have to define economics as science of welfare and science of wealth. (See Lesson 1)

Ans: Economics is a vast subject and it is not easy to give a precise definition of economics. Many scholars and authors in the late eighteenth and early nineteenth century believed that economics is the science of wealth. These scholars are called the classical thinkers. They viewed that economics deals with the phenomenon of wealth which includes nature and causes of wealth, creation of wealth b y individuals and nations etc.

The problem with wealth definition was that it did not talk about people who had no wealth. Having wealth and not having wealth divided the society into rich and “not rich” or poor. So many scholars in the early nineteenth century thought that economics should address the issue of “welfare the society” and not just wealth. Accordingly economics was seen as science of welfare.

(b) "Any producer wants to earn maximum profit and minimize cost of production. Explain the concept of cost, revenue and profit for the producer." (See Lesson 8)

Ans: Only one question in necessary

2. Answer any one of the following questions in about 40 to 60 words.               2
(a) Scarcity and choice go hand in hand. In fact issue of choice arises because resources are scarce. Explain the issue of scarcity and choice with the help of an example. (See Lesson 5)

Ans: Only one question in necessary

(b) "Goods and services both are equally important for satisfaction of human wants and these goods and services are as diverse as our wants." In the light of this statement explain the features of goods and services. (See Lesson 3)

Ans.:"Goods and services both are equally important for satisfaction of human wants and these goods and services are as diverse as our wants."

Features of goods and services:

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, scooter, fruits, vegetable, food grains 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. Thus it is the quantity and quality of producer’s good and services that will determine the availability of consumer goods and services in the market.

3. Investment: Increase in the production of goods and services will also determine the level of investment. Given the quantity of goods and services, a part of it is consumed, which satisfies the human wants. Whatever is not consumed is used for further production and it results in capital formation in the economy.

3. Answer any one of the following questions in about 40 to 60 words.                  2
(a) As we all know our wants are unlimited but our resources to satisfy these wants are limited. In the light of the given statement explain the Indian philosophy of limiting wants. (See Lesson 2)

Ans: As we all know our wants are unlimited but our resources to satisfy these wants are limited. Hence if we keep our wants as unlimited and growing, we will not be able to satisfy all of them with our limited resources. This will give rise to a lot of dissatisfaction. But on the other hand, if we limit our wants we will be able to satisfy most of them with our limited resources and this will give us more and more satisfaction. The Indian philosophy has always been to limit our wants so that we feel satisfied in life. This helps us to lead a happy life as we do not have to suffer any unhappiness due to unfulfilled wants.

(b) If production is defined as transformation of inputs into outputs then how would you describe production function? Also name two major technologies of production. (See Lesson 7)

Ans: Only one question in necessary

4. Answer any one of the following questions in about 100 to 150 words.          4
(a) Total Production, Average Production and Marginal Production are related to each other. Explain their relationship with the help of a numerical example. (See Lesson 7)

Ans.:- The three concepts of TP, AP and MP can also be understood with the help of the following numerical example.

Total Product, Average Product and Marginal Product

Units of labour (L)

TP (Units)

AP (Units)

MP (Units)

0

1

2

3

4

5

6

7

8

9

10

0

10

22

36

44

50

54

56

56

54

50

-

10

11

12

11

10

9

8

7

6

5

-

10

12

14

8

6

4

2

0

-2

-4

In the table above, L = Units of labour = 0,1,2,3,4,5,6,7,8,9 and 10.

When L= 1, it means number of labour units or level of labour employment is 1. At this level TP = 10. We know that AP = TP/L = 10/1 = 10.

When L = 2, TP =22. So AP = 22/2 = 11.

When L = 9, TP =54. So AP = 54/9 = 6.

Now calculate MP. As per formula, MP = TPL – TPL-1.

Let us calculate MP at L = 1. Here TPL means value of TP at L = 1 which is 10.

L – 1 refers to the previous level of employment of labour. Since L – 1 = 1 – 1 = 0,

TPL – 1 means value of TP at 0 or no employment. In the table at 0 units of labour TP = 0.

So TPL – TPL-1 = 10 – 0 = 10. Hence when unit of labour is 1, MP is 10.

Similarly, when there are 8 units of labour, MP = TP8 – TP8 – 1 = TP8 – TP7 = 56 – 56 = 0.

Since MP is the difference between two consecutive values of TP, it can be negative also. In the table MP at 9 units of labour is – 3. This is obtained as TP9 – TP9 – 1 = TP9 – TP8 = 54 – 56 = -2.

(b) Economies can be classified on different basis. One of such bases is 'Development'. Explain the types of economies on the basis of development citing relevant examples of each type of economy. (See Lesson 4)

Ans: Only one question in necessary

5. Answer any one of the following questions in about 100 to 150 words.          4
(a) "Economy is a man-made organization] which is created, destroyed or changed as per the requirement of the society". In the light of this statement explain the capitalist, socialist and mixed economy. Which type of economy India is? (See Lesson 4)

Ans.: "Economy is a man-made organization] which is created, destroyed or changed as per the requirement of the society".

Capitalist economy: The capitalist or free enterprise economy is the oldest form of economy. Earlier economists supported the policy of ‘laissez fair’ meaning leave free. They advocated minimum government intervention in the economic activities.

Socialist economy: In the socialist or centrally planned economies all the productive resources are owned and controlled by the government in the overall interest of the society. A central planning authority takes the decisions.

Mixed economy: A mixed economy combines the best features of capitalism and socialism. Thus mixed economy has some elements of both free enterprise or capitalist economy as well as a government controlled socialist economy. The public and private sectors co-exist in mixed economies.

India’s economy is mixed economy. 

(b) Distinguish between autonomous corporations and government companies.

Ans: Only one question in necessary

6. Prepare any one project out of the given below:                   6

(a) We know that profitis the surplus of revenue over the total cost of production and is calculated using the following expression Profit = Total Revenue – Total Cost. You have to collect the monthly cost for eight months production figure of a manufacturer and then his total revenue and marginal revenue corresponding to each monthly figure assuming that average revenue is Rs. 25. Thereafter you will have to calculate his monthly profit. Show your calculation in a tabular manner. (See Lesson 8)

Ans: Only one question in necessary

 (b) You have been provided with the following table by a producer.

Units of labour

Total Product

Marginal Product

Average Product

0

0

 

 

1

5

 

 

2

12

 

 

3

21

 

 

4

28

 

 

5

30

 

 

6

30

 

 

7

28

 

 

The producer needs your help in completing the above table and decide how many units of labour be employed to optimize the level of output. (See Lesson 7)

Ans:

Units of labour

Total Product

Marginal Product

Average Product

0

0

0

0

1

5

5

5

2

12

7

6

3

21

9

7

4

28

7

7

5

30

2

6

6

30

0

5

7

28

-2

4

In the above table, we can see that when 7 units of labour were employed marginal product (MP) is negative and also total product (TP) is started falling. This clearly implies that labour should not be increased upto 7 units and further.

Employment of labour should be stopped before 7 units.

In the above table we also see that total product is maximum when 5 and 6 units of labour are employed and marginal product is minimum when 6 units of labour are employed. So it is beneficial for producer to employ 6 units of labour to optimize the level of output.

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