NCERT Solution Economics Class 12 Chapter 1 Introduction
NCERT Solution Economics Class 12 Chapter 1 Introduction all questions and answers. Economics Class 12 1st Chapter Introduction exercise solution and experts answer. As one of online learning platforms, we (netex.) are excited to offer the NCERT Solution Economics Class 12 Chapter 1. This solution is designed to help students who are looking to brush up on their physics concepts on Chapter 1 Introduction.
1.) Discuss the central problems of an economy
Ans.
We are facing so many problems like What is produced and in what quantities, How are these goods produced, For whom are these goods produced. Briefly discuss this problems – What to produce– It is one of the central problems in an economy Every society must decide on how much of each of the many possible goods and services it will produce. Whether to produce more of food, clothing, housing or to have more of luxury goods. Whether to have more agricultural goods or to have industrial products and services. Whether to use more resources in education and health or to use more resources in building military services. Whether to have more of basic education or more of higher education. Whether to have more of consumption goods or to have investment goods (like machine) which will boost production and consumption tomorrow How to produce– Every society has to decide on how much of which of the resources to use in the production of each of the different goods and services. Whether to use more labour or more machines For whom to produce– This problem deals with determining the final consumers of the goods produced. every economy faces the problem of allocating the scarce resources to the production of different possible goods and services and of distributing the produced goods and services among the individuals within the economy.
2.) What do you mean by the production possibilities of an economy?
Answer: An allocation of the scarce resource of the economy gives rise to a particular combination of different goods and services. Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy.
3.) What is a production possibility frontier?
Ans -Just as individuals face scarcity of resources, the resources of an economyas a whole are always limited in comparison to what the people in the economy collectively want to have. The scarce resources have alternative usages and every society has to decide on how much of each of the resources to use in the production of different goods and services. In other words, every society has to determine how to allocate its scarce resources to different goods and services. An allocation of the scarce resource of the economy gives rise to a particular combination of different goods and services. Given the total amount of resources, it is possible to allocate the resources in many different ways and, thereby achieving different mixes of all possible goods and services. The collection of all possible combinations of the goods and services that can be produced from a given amount of resources and a given stock of technological knowledge is called the production possibility set of the economy production possibility.
4.) Discuss the subject matter of economics.
Ans -Traditionally, the subject matter of economics has been studied under two broadbranches:Microeconomics and Macroeconomics. In microeconomics, we study the behaviour of individual economic agents in the markets for different goods – and services and try to figure out how prices and quantities of goods and services are determined through the interaction of individuals in these markets. In macroeconomics, on the other hand, we try to get an understanding of the economy as a whole by focusing our attention on aggregate measures such astotal output, employment and aggregate price level. Here, we are interested in finding out how the levels of these aggregatemeasures are determined and how the levels of these aggregate measures change over time. Some of the important questions that are studied in macroeconomics are as follows: What is the level of total output in the economy? How is the total output determined? How does the total output grow over time? Are the resources of the economy (eg labour) fully employed? What are the reasons behind the unemployment of resources? Why do prices rise? Thus, instead of studying the different markets as is done in microeconomics, in macroeconomics, we try to study the behaviour of aggregateor macro measures of the performance of the economy frontier is graph that showing all the possible combination of two good that can be product by using available resources and technology.
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5.) Distinguish between a centrally planned economy and a market economy.
Centrally planned economy |
Market economy |
1.In a centrally planned economy, the government or the central authority plans all the important activities in the economy. | 1.In a market economy, all economic activities are organized through the Market. |
2.All important decisions regarding production, exchange and consumption of goods and services are made by the government in centrally planned economy. | 2.Some important decisions are taken by the government and the economic activities are by and large conducted through the market. |
3. centrally planned economy best example is China . | 3.Market economy best example is United States of America. |
6.) What do you understand by positive economic analysis?
Answer: Positive economic analysis we understand that what is or how an economic problem is solved by analysing various positive statements and mechanisms. Positive economic analysis depending on whether we are trying to figure out how a particular mechanism functions or we are trying to evaluate it. In positive economic analysis, we study how the different mechanisms function, and in normative economics, we try to understand whether these mechanisms are desirable or not.
7.) What do you understand by normative economic analysis?
Answer: Normative economic analysis we understand that whether a particular mechanism is desirable or not.
8.) Distinguish between microeconomics and macroeconomics.
Microeconomics |
Macroeconomics |
microeconomics, we study the behavior of individual economic agents in the markets for different goods and services and try to figure out how prices and quantities of goods and services are determined through the interaction of individuals in these markets. | In macroeconomics we try to get an understanding of the economy as a whole by focusing our attention on aggregate measures such as total output, employment and aggregate price level. Here, we are interested in finding out how the levels of these aggregate measures are determined and how the levels of these aggregate measures change over time. |
Microeconomics we studied about prices and quantities of goods and services of individual in these markets, reasons behind the unemployment of resources , prices rise. | Macroeconomics we studied level of total output in economy , total determination , total output grow over the time , |
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