Basic Concepts of Economics Class 8 Extra Questions and Answers Notes
We have provided here Basic Concepts of Economics Class 8 Extra Questions and Answers Notes by our Experienced Teacher. This Extra Questions and Answers Notes consists of MCQ Questions and Answers; Very Short Type Questions and Answer & Short Type Questions and Answers.
(MCQs):
1.) What is demand in economics?
a) A desire for goods and services
b) A desire along with the ability to buy
c) The quantity of goods and services available
d) The price of goods and services
Answer: b
2.) What happens to production, income, and supply when demand increases?
a) They decrease
b) They remain the same
c) They increase
d) They become unpredictable
Answer: c
3.) Which economic term refers to the quantity of goods available for sale at a given price?
a) Demand
b) Supply
c) Consumption
d) Utility
Answer: b
4.) What does distribution in economics involve?
a) The distribution of wealth among individuals
b) The distribution of goods among consumers
c) The distribution of goods produced among factors of production
d) The distribution of income among consumers
Answer: c
5.) What is the use of goods and services to satisfy wants called in economics?
a) Production
b) Utility
c) Consumption
d) Supply
Answer: c
6.) Which type of utility involves giving a definite shape or form to a product?
a) Principal utility
b) Form utility
c) Time utility
d) Place utility
Answer: b
7.) What is the value expressed in the form of money called?
a) Demand
b) Utility
c) Price
d) Profit
Answer: c
8.) In economics, what is the reward that a producer gets for their services in the production process called?
a) Wage
b) Rent
c) Interest
d) Profit
Answer: d
9.) What economic concept emphasizes cooperation, equality, and self-help among individuals?
a) Competition
b) Co-operation
c) Exploitation
d) Corporation
Answer: b
10.) What is the total income obtained in a year from all sources of production called?
a) Gross domestic product (GDP)
b) Gross national product (GNP)
c) National income
d) Per capita income
Answer: c
One liners:
1.) What is the ability to satisfy wants called?
Answer: Utility
2.) What is the quantity of economic goods that can be brought at a fixed price at a given time?
Answer: Demand
3.) What term is used to describe goods and services readily available for sale?
Answer: Supply
4.) What is the reward that a producer gets for their services in the production process?
Answer: Profit
5.) What is the use of goods and services to satisfy wants?
Answer: Consumption
6.) What is the value expressed in the form of money?
Answer: Price
7.) What is the total income obtained in a year from all sources of production?
Answer: National income
8.) What type of utility involves giving a definite shape or form to a product?
Answer: Form utility
9.) What economic concept emphasizes cooperation, equality, and self-help?
Answer: Co-operation
10.) What is the innate quality of humans to work hard and improve their standard of living called?
Answer: Labour
Short question :
1.) What is demand in the economy and what factors affect it?
Answer: Demand in economics refers to the desire, willingness and ability to buy a certain amount of goods or services at a certain price. Factors affecting demand include price changes, consumer preferences, and income levels.
2.) How does an increase in demand affect production and the economy as a whole?
Answer: An increase in demand usually leads to an increase in production, employment, income and general economic growth. It can improve the standard of living and promote the development of the country.
3.) Define supply in economics and explain how it relates to price changes.
Answer: Supply refers to the amount of goods and services available for sale at a given price. As prices rise, supply tends to increase, leading to improved living standards and economic development.
4.) What is the relationship between supply and demand in economics?
Answer: Demand and supply are interdependent. The changes together affect each other and play a key role in determining the prices of goods and services in the market.
5.) What does “production” mean in economics and what are the important factors of production?
Answer: Production in an economy involves creating profits from available resources. Factors of production are natural resources, work, capital and organization.
6.) Explain the concept of “distribution” in economics and its role in maintaining economic balance.
Answer: Distribution includes the distribution of national income among land, labor, capital and organization. It plays an important role in balancing supply and demand without hindering production.
7.) What does “consumption” mean in economics and how does it affect the wealth of a nation?
Answer: Consumption is the use of goods and services to satisfy needs. This directly affects the prosperity, standard of living and employment rate of the country. An increase in consumption can lead to economic growth.
8.) Define “utility” in economics and its various forms. How is it different from satisfaction?
Answer: Utility is the ability of goods and services to satisfy human needs in such forms as basic, form, time and local utility. It differs from satisfaction because utility is the ability to provide satisfaction.
9.) What is “price” in economics and what role does it play in balancing supply and demand?
Answer: Price represents the monetary value of a good or service. Its main function is to equalize supply and demand. If they are in equilibrium, the price will remain stable.
10.) How does “profit” affect economic activity and what factors determine the level of profit in production?
Answer: Profit is the payment for production services after deduction of expenses. It is the main driving force of economic activity and its level depends on production efficiency and market conditions.
Long answer type:
1: What is the relationship between supply and demand in the economy and how do they affect the development of a nation?
Answer : Supply and demand are fundamental concepts in economics that are closely related. When the demand for a product or service increases, it usually leads to an increase in production, employment, income and standard of living in a country. Conversely, when demand falls, it often leads to lower production, income and living standards. This dynamic relationship between demand and supply is an indicator of a country’s progress. Strong demand is a sign of a thriving economy, while declining demand can be a sign of financial problems.
2: How is consumption related to production and why is it essential to the prosperity of a country?
Answer: Consumption and production are closely related in the economy. Consumption is the use of goods and services to satisfy human needs. It plays a key role in the country’s well-being because it controls production. Growing consumption increases production and incomes, creates a market for goods and provides job opportunities. On the other hand, a decrease in consumption leads to a decrease in production, income and even unemployment. In essence, consumption and production are two sides of the same economic coin, and their interaction significantly affects the overall economic well-being of the nation.
3: In economics, what is utility and how does it differ from satisfaction?
Answer- In economics, utility refers to the ability of goods and services to satisfy human needs either directly or indirectly. It is the ability to create satisfaction, but the usefulness itself cannot be measured quantitatively or objectively. Unlike utility, satisfaction is a true feeling or feeling of satisfaction that results from the usefulness of goods and services. Basically, utility is the potential to provide satisfaction, while satisfaction is the actual emotional or psychological state that people experience when their desires are fulfilled. Both utility and satisfaction are central to consumer behavior and financial decision making.
4: What role does price play in the interaction of supply and demand in the economy?
Answer-Price is a critical mechanism in the economy to balance the interaction between supply and demand. When the demand and supply of a product or service are in balance, the price remains stable. However, if there is a gap between supply and demand, the price will adjust accordingly. When demand exceeds supply, prices usually rise, prompting producers to increase supply. Conversely, if supply exceeds demand, prices may fall, forcing producers to cut production. This dynamic pricing mechanism helps maintain market equilibrium and ensure that goods and services are efficiently allocated and that surpluses or shortages do not occur over long periods of time.
5: What does profit mean in economics and how does it affect economic activity and development?
Ans- Profit is a basic concept in economics because it represents the residual income after all costs associated with production have been subtracted from total income. In economics, profit is seen as payment for services rendered in the production process. This has a major impact on economic activity and development. If the profit level is high, it stimulates economic activity, encourages investment and promotes economic development. On the other hand, a decrease in profits can lead to a decrease in economic activity, possible economic crises and a slowdown in the country’s development. Basically, profit is the driving force of the economy, influencing decisions, investments and the general health of the national economy.