Odisha State Board CHSE Odisha Class 12 Economics Solutions Chapter 2 Basic Economic Concepts (Wants, Utility, Goods, Value, Price and Wealth) Questions and Answers.
CHSE Odisha 12th Class Economics Chapter 2 Question Answer Basic Economic Concepts (Wants, Utility, Goods, Value, Price and Wealth)
Group – A
Short type Questions with Answers
I. Answer within Two/Three sentence
Explain the following statements
Question 1.
Free goods have value in use.
Answer:
Free goods are free gifts of nature whose supply is abundant in ralation to its demand. So these goods do not have value-in-exchange but have value in use.
Question 2.
Goods having Value-in-exchange must have value-in-use.
Answer:
Goods having value-in-exchange are capable of satisfying human wants & can be exchanged in the market So goods having value” in exchange must have value in use.
Question 3.
Goods having value-in-use may not have value-in-exchange.
Answer:
There are certain free gifts of nature whose supply is more in relation to its demand & hence are not exchanged. Goods like water of the river, air etc have value in use but due to abundant supply, these goods have no value-in-exchange.
Question 4.
The consumption of public goods is non-excludable.
Answer:
The public goods are supplied by the government for the collective welfare of the people. As it is collectively consumed & the government is the owner of these goods & the consumer can not exclude other from consuming these goods & hence the consumption becomes non-excludable.
Question 5.
Producers goods do not provide direct statistaction
Answer:
Producers goods are used for further production of goods. As such, these goods do not provide direct satisfaction.
Question 6.
Utility is subjective.
Answer:
Utility is psychic entity which resides in the mind of the consumer. The utility derived from a goods is assessed by the consumer concerned & hence it is subjective.
Question 7.
Utility is not same as usefulness
Answer:
There are some goods like wire, opium etc are not useful to human beings. But these are consumed because of their utility
Question 8.
Wants are competitive.
Answer:
On account of unlimited wants and limited resources, a man can not satisfy all of his wants. But because of multiplicity of wants, these compete with each other to be satisfied.
Question 9.
Wants are alternative.
Answer:
There are certain wants Which can be satisfied in an altermative manner. Like hunger which can be satisfied by rice or bread. Hence, wants are altermative.
Question 10.
All capital are wealth; but all wealth are not capital
Answer:
Wealth refers to all the goods having utility, scarcity marketability & external possession. These can satify the human wants directly or it can be used as capital in producing goods. So all capital are wealth; but all wealth are not capital.
Question 11.
A particular want is sutiable
Answer:
Thoughj the wants are unlimited, yet if aman tries its best to satisfy a particular wants by purchasing various units of it, that wants may be satisfied. So, a particular wants is satisfied.
Question 12.
Price of goods may change but value remains constant
Answer:
Price is the exchange value of a goods measured in terms of money. It refers to what a commodity can purchase in terms of other other commodities. So price measures the value in exchange in terms of money. Thus the price may change but value-in-exchange itself remains constant.
Question 13.
Goods satisfy human wants.
Answer:
Goods possesses the wants satisfying power (utlity). So it .can satisfy human wants.
Question 14.
The gifts of nature are free goods.
Answer:
The supply of gift of nature to mankind is abundant in relation to its demand. Hence there goods are available freely & treated as free goods.
Question 15.
Economic goods have value-in-exchange.
Answer:
The supply of goods is scarce in relation to its demand & hence there goods are bought & sold in the market. Thus, the economic goods have value-in-exchange.
Question 16.
Public goods are meant for collective consumption.
Answer:
Public goods are supplied by the government for the collective welfare & also indivisible in nature. So these goods are collectively consumed.
Question 17.
The consumption of public goods is non-excludable. Or, Principle of exclusion is not applicable to public goods.
Answer:
The public goods are meant for joint or collective consumption & hence its consumption is non-rival. So, the principle of exclusion is not applicable to public goods.
Question 18.
Utility is subjective.
Answer:
Utility derived from a goods depend upon the human psychology & it resides in the mind of the consumer. So utility is subjective.
Question 19.
Utility is not same as usefulness.
Answer:
Utility is simple the wants satisfying power of a commodity, but usefulness describes the beneficial effects of a good. So utility is quite different from usefulness.
Question 20.
All the goods have value-in-use but not value-in-exchange.
Answer:
The goods are consumed because of value-in-use. The free goods are of these category which have value in use but not value in exchange.
Question 21.
Economic goods are scarce in supply.
Answer:
Any goods whose supply is scarce in relation to its demand can have value-in-exchange. Economic goods have the attribute like value-in-exchange because of scarce supply & abundant demand.
Question 22.
There can be general rise or fall in price but not value.
Answer:
Value in economics refers to value in exchange i.e. What a commodity can purchase in terms of other commodities. But price is the monetary expression of value in exchange which can be changed.
Question 23.
All the economic goods are wealth.
Answer:
The economic goods possess the characteristics of wealth. So, all the economic goods are wealth.
Question 24.
Health is not treated as wealth in economics.
Answer:
Health does not possess all. the features of wealth like transferability or marketability. Hence, it is not treated as wealth in Economics.
Question 25.
Voice of a singer can not be treated as wealth.
Answer:
Voice of a singer is a personal quality & hence cannot be transferred. So it is not wealth.
Question 26.
H. S. C. certificate is not wealth in Economics.
Answer:
H. S. C. certificate cannot be legally marketed nor transferred. So it is not wealth in economics.
Question 27.
Human wants are unlimited.
Answer:
Human wants have no limit. If one wants is satisfied, another wants takes its place. Satisfaction of wants being a continuous process, the human wants are said to be unlimited.
Question 28.
Wants are recurring.
Answer:
Because of limited resources, one gan not satisfy all of his wants. So the goods compete with each other for which choice is to be made.
Question 29.
Wants are recurring.
Answer:
There are some wants like taking meals or drinks very often occur in a day. So these wants are said to be recurring.
Question 30.
The classification of human wants is relative.
Answer:
The classification of human wants into necessaries, comforts & luxuries is relative in the sense that it varies from person to person, place to place and time to time. The goods like car is said to be a luxurious items for a student whereas it is necessary for an officer.
Question 31.
The consumption of luxuries is not justified.
Answer:
The consumption of luxuries is morally bad & economically wasteful. Hence, its consumption is not justified.
II. Answer within Five/Six sentence :
(A) Write Short Notes on :
Question 1.
Utility:
Answer:
The wants satisfying power of a commodity is known as utility. It is the capacity or the quality of a goods to satisfy wants. Those goods which only possesses utility can satisfy the wants & hence those goods are purchased or consumed. Utility is at the root of consumption. Utility is subjective and it is not same as usefulness. It is different from pleasure and satisfaction, utility can be measured cardinally or ordinally.
Question 2.
Service Utility:
Answer:
The utility derived from various services is called service utility. Like goods, the services extended to a man can satisfy his wants. The service of a doctor, a lecturer or an engineer can satisfy the wants & hence it has utility. In other words, the utility derived from the use or consumption of non-material goods is termed as service utility.
Question 3.
Value:
Answer:
In economics, value means value-in-exchange. Value in exchange means what a commodity can purchase in terms of other commodities. It is the purchasing power of one commodity in terms of other commodities and services. According to Marshall, the value that is exchange value is the amount of second thing which can be got there and then in exchange for the first. Exchange value expresses the relation between two things at particular time and place. Economic goods have got value in-exchange. Free goods have got no value-in-exchange as nobody would give anything in exchange of it.
Question 4.
Price:
Answer:
Prices is the measure of the exchange value of a commodity in terms of money. When we say that the price of sweets is one rupee, it implies that rupee one is equal to the exchange value of that sweets. Price thus expresses the purchasing power of a commodity in terms of money. Value of a commodity means the comparison between any two commodities whereas price is the money value of commodity. Price is highly fluctuating.
Question 5.
Cosmopolitan wealth:
Answer:
Cosmopolitan wealth is the wealth of the whole world. It is the sum total of the wealth of all nations. While estimating all international debts should be deducted. All the nations have collective right on such types of wealth. U.N.O., International Monetary Fund (I.M.F.), International Bank of Reconstruction and Development the oceans of the world, the surface of the moon or mars are the examples of International wealth. There are some who consider scientific.knowledge which crosses the boundary of a particular state are regarded as international wealth.
Question 6.
Economic Goods :
Answer:
The goods having value-in-exchange is called economic goods. These goods are exchanged for money. Price is paid for the possession of these goods. The demand for these goods is more in relation to its supply i.e. supply of these goods are scarce in relation to its demand. Economic problems are created in case of these goods. TV, Radio, watch, food, Dress etc. are the examples of economic goods.
Question 7.
Consumers goods:
Answer:
The goods which can directly satisfy the human wants are called consumers goods. These goods are called goods of first order. These goods may be perishable or durable in nature. The goods which can be used once in the satisfaction of wants is perishable goods & the goods which can be frequently used for the satisfaction of human wants are called durable goods. Food items are the example of perishable goods and T.V., Radio are the durable goods.
Question 8.
Intermediate goods:
Answer:
The goods which are used in the further production are called intermediate goods. These goods can not directly satisfy the human wants. Rather these are used in producing goods. These goods provide indirect satisfaction to the consumer as these are used in the production. Flour for bread is an example of intermediate goods. The value of these goods are excluded while calculating national income.
Question 9.
Private goods:
Answer:
The goods which are owned by the private individuals are called private goods. These are possessed by the private individuals for their own use or consumption. Others do not have any right over these goods. In case of these goods the ‘Principle of exclusion’ is highly applicable. The person who consumes or purchases it can exclude others from the field of consumption. One who pays the price purchases it. There observed competition among the consumers for the purchase of these goods.
Question 10.
Public Goods:
Answer:
Public goods are owned & supplied by the government. These goods are used collectively by the common mass. Principle of exclusion is not applicable to such goods. There observed no rivalry, nor competition amongst the consumers for the possession of these goods. These goods are supplied for collective welfare. Government is the prime supplier of public goods.
Question 11.
Social wealth:
Answer:
The wealth under the possession of the society is called social wealth. The ownership of such goods is vested with the society. All the members of the society have equal right over this wealth. This wealth is otherwise known as collective wealth. These goods are collectively consumed by the members of the society.
Question 12.
Goods and Services :
Answer:
Anything which can satisfy the human wants is called goods. It may be material or non-material. Non-material goods are called services. Goods which usually denotes material goods is visible, tangible and it has got a shape but service is invisible, intangible and it does not have any shape. Goods can directly satisfy the wants of a person who consumes it. But in case of service, one person renders service to other for the satisfaction of his wants. A consumer may feel the utility of a goods for a long-time. But the utility of services perishes at the very moment it is rendered.
Question 13.
Free Goods & Economic Goods:
Answer:
- Free goods are the gift of nature whereas the economic goods are the outcome of human effort.
- Free goods are available freely; but economic goods are available with the payment of price.
- The supply of free goods is abundant in relation to its demand; but the supply of economic goods is scarce in relation to its demand.
- There is no ownership of any individual on free goods; but the individual (s) or any organisation own the economic goods.
Question 14.
Consumers’ goods & Producers’ goods :
Answer:
- Consumers’ goods are those goods which can directly satisfy the human wants whereas the producers’ goods are those goods which can indirectly satisfy human wants.
- Consumers’ goods are exclusively meant for direct consumption but the producers’ goods are used for further production.
- Consumers goods and producers goods may be perishable or durable in nature.
- The distinction between consumers goods & producers goods is relative in nature. One good may be treated as consumers goods & producers goods on the basis of its use.
- The demand for consumers goods is direct demand whereas the demand for producers goods is derived demand.
Question 15.
Private goods & Public goods :
Answer:
- The goods which are under the control & ownership of private individuals (s) are called private goods. But the goods which are owned by the government is called public goods.
- Private goods are used for the satisfaction of the individual wants; but public goods are used for the satisfaction of collective wants.
- The consumption of private goods is rival & excludable but the consumption of public goods is non-rival & non-excludable.
- The consumption of private goods leads to create welfare of the individual but the consumption of public goods create collective welfare for the society as a whole.
Question 16.
Wealth and Title to wealth :
Answer:
The wealth which can satisfy the wants directly or indirectly is known as wealth. The assets claimed to be economic goods are called titles to wealth and can not satisfy the wants directly. Rather, the human wants can be satisfied with these assets. Stocks, shares, Bills of exchange and even money can be called as titles to wealth.
Question 17.
Wealth and Capital:
Answer:
- Wealth refers to all economic goods which can satisfy the human wants directly or indirectly. But the capital is that part of the wealth which can only satisfy the human wants indirectly.
- Wealth covers all the economic goods whether it is consumers’ goods or producers’ goods. But capital is only the producers goods which are used for further production.
- Wealth used for further production or for earning income is treated as capital in Economics.
Question 18.
Wealth and Money :
Answer:
- Wealth refers to economic goods having four features like utility, scarcity, transferability & external possession. But money is a medium of exchange by which goods & services can be possessed. It does not have utility of its own.
- Wealth can satisfy the human directly because of its utility; but money acts a medium to purchase the wealth for the satisfaction of human wants.
- Wealth is demanded for its own sake; but money is demanded for the purchase of wealth.
- Wealth has got both value-in-use and value in exchange; but money has got only the value-in-exchange.
Question 19.
Wealth and Income :
Answer:
- Wealth is a stock of economic goods possessed by a man. Income is a flow which arises when wealth is invested by a way of capital.
- Wealth is a fund but income is a stream.
- Wealth generates income. It is a flow which originates from economic goods.
- The stock of wealth may remain unchanged but the income earned from it goes on changing.
Question 20.
Wealth and Welfare :
Answer:
- The possession of wealth is the root cause of welfare. Greater stock of wealth yields more of welfare.
- Sometimes, huge amount of wealth leads to none of welfare but wealth is one of the conditions of welfare whereas welfare is a multivariate concept.
- Wealth can be externally possessed but welfare is greatly a psychological concept.
- More of wealth does not lead to more of welfare always, it may even impede the welfare.
Question 21.
Desire and human wants
Answer:
- Desire refers to willingness of the individual for having a goods; but human wants refers to effective desire for having a goods.
- Desire of a man only symbolises the willingness of that man for having a goods; but human wants indicates the willingness to buy a goods backed by ability to pay and willingness to spend.
- Desire is one of the conditions of human wants.
- Human wants is a wider concept whereas desire is a narrower concept.
- One man may have desire to have a goods but it can not be called as his wants if he does not have adequate purchasing power or if he is not interested to spend money towards this goods.
Group – B
Long Type Questions With Answers
Question 1.
What is utility ? What are the characteristics of utility ?
Answer:
Utility refers to wants satisfying power of a commodity. The capacity or the quality of the goods by which human wants are satisfied is called utility. If the goods and services directly or indirectly satisfy the wants, it can be asserted that the goods possess the utility. Thus, utility indicates the power of the commodity to satisfy the wants. It is the root-cause of consumption. People purchase or consume goods because of its utility.
FEATURES OF UTILITY:
Utility of a goods being the basic cause of consumption possesses several features. The important features of utility are mentioned below :
(a) Utility is subjective : Utility is a subjective concept. It resides in the minds of a person. It can be adjudged by introspection. It is not objective. The same commodity will provide different utility to different persons. An orange if consumed by an ordinary man gives less utility than a- person who likes orange. So, utility is subjective and also a relative concept. It changes from person to person, time to time and place to place.
(b) Utility is not equal to usefulness : It is highly changeable. Utility is different from usefulness. A thing like opium or wine has no usefulness but possesses utility as they satisfy human wants. Hence, these are useful. Some people may consider this as immoral. But utility as a concept is ethically neutral. Things considered bad or undesirable has got utility like poison or opium.
(c) Utility is different from pleasure : Things may not be pleasant but they have utility. Bitter medicines or arms and ammunitions do not give pleasure but they have utility. So, utility can be found in unpleasant things.
(d) Utility is different from satisfaction : Satisfaction is the result of using a commodity. When we consume a commodity we get satisfaction. We consume it because it has utility. Utility is the cause of consumption and satisfaction is the effect of consumption.
(e) Utility may be cardinal or ordinal: These two terms refer to the measurement of utility. Utility are measured like 1 2 3 or 4. This is called cardinal measurement. Here one is half of two or two is double of one. The otherway to measure it is to say it as 1 st, 2nd, 3rd etc. These measurement is called ordinal numbers. Here, the utility is ranked or ordered. After 1 st comes 2nd but one cannot say 2nd is twice of the first. It may be more than double or less than double of 1 st.
Question 2.
What is Wealth ? What are the features of Wealth ?
Answer:
In economics, wealth refers to all goods having exchange value. Therefore, all economic goods are treated as wealth. According to Lord Keynes, the famous economist of the century, all these goods which have value and the capacity to satisfy human wants are called wealth in economics. Wealth is nothing but economic goods.
Characteristics of Wealth : There are four attributes of wealth such as (i) Utility, (ii) Scarcity, (iii) Transferability, and (iv) External to man.
(i) Wealth must possess Utility : Any goods which can satisfy human want is called wealth. A rotten egg is not wealth because it can not satisfy a human want. On the other hand, wine and opium are wealth because it does satisfy a human want.
(ii) Scarcity : The goods must be limited in supply in comparison to its demand. The commodity can be obtained by a payment. In other words, all economic goods are wealth Air, water, sunshine or moonlight are not wealth because they are available in plenty. Nobody pays anything to get these things. These things have got’great value in use but no value in exchange. This explaines the paradox of value in economics. Diamond which has no value-in-use has got great value-in-exchange because it is scarce in supply. Wealth should be always scarce.
(iii) Marketability or Transferability : A commodity to be wealth must be transferable and marketable. If a thing is marketable, it must be transferable. Transferability and marketability mean both aspects of the same things. Transferability does not mean physical transferability, it may mean transferability of ownership. A man can sell his land or good will of his business to others. This is also transferability. Because wealth will be marketable. Personal qualities like honesty, skill, ability and intelligence are not wealth. These are the source of wealth but not wealth proper because it cannot be sold in the market nor the ownership changed.
(iv) External to man : In order to be wealth a thing must be external to man. If something is an internal quality like the quality of a dancer, singer, painter or actor that cannot be regarded as wealth. The quality of these people are not wealth but their serv ice which can be sold in the market are called wealth. A person’s M.A. degree can not be regarded as wealth, since it cannot be transferred it is not wealth.
The above analysis illustrates that wealth has four attributes. Hence, anything possessing all these attributes can be considered as wealth in economics. As such, to treate anything wealth, all these four features should be present in that thing.
Question 3.
What is wealth ? Make a classification of wealth.
Answer:
In economics wealth refers to all goods having exchange value. Therefore, all economic goods are considered as wealth. According to Lord Keynes, the famous economist of the century, all these goods which have value and the capacity to satisfy human wants are called wealth in economics. Wealth is nothing but economic goods.
Classification of Wealth : Wealth can be classified into different types. The important classification of wealth is described below :
(A) Individual Wealth :
- It refers to the house building furniture, bond and shares of man. These are transferable material goods. From this, the negative wealth of a person like shares and bonds which he holds to pay others are deducted.
- Non-material goods like the good- will of a business man, or his professional connections which can be marketed and brings income to him are called individual wealth.
(B) National Wealth: Wealth which belongs to the entire nation is called national wealth. In a broad sense, it includes the following four elements :
1. The sum total of all individual wealth constitute the wealth of the nation. The internal debt due to the one another and external debt and loan of the country should be deducted from the aggregate wealth to arrive at the proper national wealth.
2. Marshall included the free gifts of nature like river, mountains and forests as the wealth of the country. In the strict sense of the term, these are not economic goods and hence not wealth.
3. Public material property like roads, bridges, canal, public parks and the railway of the country are included in the national wealth.
4. Some economists suggest that good scientific knowledge of production and scientific attitudes profoundly influence the national wealth of the country and as such it should be included in the national wealth. German skill or American business talent are the examples of national wealth. But Marshall was of the opinion that scientific discoveries, inventions and enchanting literature belong to the whole of humanity and cannot be regarded as national wealth.
C. Cosmopalitan Wealth: Cosmopolitan wealth is the wealth of the whole world. It is the sum total of the wealth of all nations. While estimating, we should deduct all international debts. All the nations have collective right on such types of wealth. U.N.O., International Monetary Fund (I.M.F.), International Bank for Reconstruction and Development the Oceans of the World, the surface of the Moon or Mars are the examples of International wealth.
D. Potential Wealth: Potential wealth is the wealth which lie unused or unexploited like coal, iron or gold.
E. Negative Wealth: It refers to the borrowing of the country or individual which will be returned after a time.
Question 4.
What do you mean by human wants ? What are the characteristics of human wants ?
Answer:
Human wants is the starting point of all the economic activities. Wants, efforts and satisfaction constitute the subject-matter of economics. Thus, human wants occupy the first position in economics. Human wants refer to the desire for the possession of a commodity. This desire must be effective. The desire is said to be effective if the consumer has willingness to buy, ability to pay and willingness to spend. So, the effective desire for the possesion of a commodity is known as human wants.
Human wants is a vital concept in the study of economics. It possesses various features. The important features or characteristics of human wants are mentioned below.
Characteristics of human wants :
(a) Human wants are unlimited : Human wants have no end to it. These are unlimited in number. According to Marshall, human wants are countless in number and various in kinds. No man is able, to satisfy his wants however rich he may be. If he wants a television and gets it, then he wants a car and the moments he gets a car, he wants a building. If he is a poor man he thinks about food, cloth and shelter. When one of his want is satisfied, another takes its place. Wants multiply with the progress of civilization. Modem man has variety of wants, like the waves of the sea which is countless and numberless.
(b) A Particular Human Wants is Satiable : A particular wants is limited. Each separate wants has a limit. If a man needs a cup of tea, he can saisfy this particular wants by taking few cups of tea. There will be a time when he will refuse to have more of it. So the want of tea being a particular want is limited and satiable.
(c) Wants are Competitive : Wants compete with each other to be satisfied. Wants compete because the wants are limitless in number and the means to satisfy these wants are limited. So a choice is made as to what is more urgent want and less urgent. Wants are graded in order of importance and then the most important one is satisfied. The competition among wants may be closer or distant. Close competition is held between substitutes like tea and coffee or oranges and apples. But distant competition is made between dissimilar things like motor car and cinema show.
(d) Wants are Complementary: There are some goods required in groups for the satisfaction of our want. Motor car will not run without the petrol and mobil or a pen will not write without ink. So the want of motor car also implies want for petrol and mobil. Here wants are complementary because commodities are wanted jointly.
(e) Wants are Alternative : Some wants are alternative because they can be satisfied by alternative things. Thus, hunger can be satisfied by bread or rice or sweets. Thrist can be quenched by water, lassi or Cola.
(f) Wants Recur Again: Some wants recur again and again. They are satisfied in the morning but again arise in the evening. We take a cup of tea in the morning and satisfy our wants but again in the evening we want another cup of tea. There are some persons who feel the want of tea always. Thus, some wants recur.
(g) Some Wants Become Habits : Wants change into habits. At that time it becomes a permanent want. Someone may take tea when he suffers from cold, but if he starts taking it regularly it becomes his habit. Our want for wine, cigarette, tea, opium, coffee or pan are examples of habitual wants.
(h) Wants Vary in Intensity : Wants have different intensities. Some wants are more urgent and some are less. Those wants which are more urgent are more intense. This is nothing but grading wants according to their importance. A students feels the intensity of wants of book and journals than a bicycle.
(i) Wants are both Complementary and Competitive : Some wants are complementary in the beginning but become competitive afterwards. The usual example of such a wants is man and machine. The machine at first runs with the help of a man & it becomes competitive with man afterwards because man and machine do the same work or satisfy the same want. The agitation of workers in some industries in India against automation is due to the competition of man and machine to do the same work.
(j) Present Wants are preferred to Future Wants : Present wants are always felt more important than the future wants. People always satisfy their current wants and postpone their future wants. Future is uncertain and hence people satisfy the current wants first and postpone future wants.
(k) Wants vary with time, place and person:. We do want a glass of cold drinks in summer season but a cup of tea in winter to quench our thirst. Similarly, hot water is not wanted at Cuttack during summer but it is required in Simla. A person living in a town may require pair of trousers whereas a man in rural area will prefer a dhoti. Wants are influenced not only by time, place or person but also by salesmanship and advertisement. People want a thing because of advertisement. Social factors and customs influence the wants of a man.
Question 5.
What do you mean by human wants ? Make a classification of human wants.
Answer:
Human wants is the starting point of all the economic activities. Wants, efforts and satisfaction constitute the subject-matter of economics. Thus, human wants occupy the first position in economics. Human wants refer to the desire for the possession of a commodity. This desire must be effective. The desire is said to be effective if the consumer has willingness to buy, ability to pay & willingness to spend. So, the effective desire for the possesion of a commodity is known as human wants.
(a) Classification of Human Wants : Human wants are classified necessaries such as. Comforts and luxuries. Necessaries are again divided into three categories such as-
(a) Necessaries of existence or Bare necessaries.
(b) Necessaries of Efficiency.
(c) Necessaries of Convention or conventional necessaries.
(i) Necessaries : Necessaries are those things of life without which a man cannot live. Necessaries constitute the urgent wants of life. Necessaries are further sub-divided into necessaries of life, efficiency and convention.
(a) Necessaries of Life: Necessaries of life are those wants without the satisfaction of which a man cannot live. This is otherwise known as necessaries of existence. Food, clothing and shelter are the examples of necessarise of life. These are called absolute necessaries.
(b) Necessaries of Efficiency: Those commodities and services which increase the efficiency of the workers are known as necessaries of efficiency which means the working ability of a person. A pen for a student or a car for a doctor increases their efficiency to work. Similarly, good food like milk, egg and fish increase the efficiency of the worker. A good workshop is favourable for increasing the efficiency.
(c) Conventional Necessaries : These necessaries arise out of social convention and habit. Heavy dowrey and wasteful expenditure on ceremonies are conventional necessaries which arise due to social custom. Habit of smoking, drinking of wine or chewing pan are the examples of conventional necessaries which arise due to habit. If these necessaries are abolished, the efficiency of a person will not be affected. All these necessaries differ from person to person, country to country and climate to climate.
(ii) Comfort: Comforts are those things of life which make life easy and comfortable. The use of those things do not increase our efficiency but the non-use of it decreases our efficiency. An electric fan in summer season, a cycle for a student residing four kilometers away from the college or good food are the examples of comfort. The distinction between necessaries of efficiency and comforts is not clear cut. They differ in degree but not in kind.
(iii) Luxuries : Luxuries are those things which are not necessary for life nor for increasing efficiency. These are things which satisfy superfluous consumption. Motor car for a student is an example of luxury as a diamond necklace for a lady. Luxuries like expensive food or television set or gold ornaments are harmless but wine and gambling are harmful luxuries. They decrease the efficiency of workers. The consumption of such luxuries increase social evil and tension. It tempts a man to practise corruption and he accumulates black money.
Question 6.
What are the luxuries ? Is the consumption of luxuries justified ?
Answer:
Luxuries are those things of human life which satisfy superflous wants. These are intended for display of vanity and aristocracy of a person. There is a controversy among economists whether consumption of luxury is beneficial or harmful. Arguments in favour of consumption of luxuries:
(a) Employment: Production of luxurious articles create employment. But production of necessaries also can create similar or even more employment.
(b) Transfer of Income : Luxuries are consumed by the rich and are produced by the poor. Therefore, there is transfer of income from the rich to the poor. But transfer of wealth from the rich to the poor can be affected by taxing rich and doing public works for poor than misutilising resources of luxurious production.
(c) Consumption of luxuries encourage invention and new method of production. But such inventions are also possible in case of necessaries.
(d) Consumption of luxuries develop a taste for liberal art like painting music, dance, drama and decoration. Nobody objects to have such cultural shows. They are a part of national life. But every body will object if it is only intended for rich people.
Against Consumption of Luxuries :
(i) Luxuries display a sense of vanity and as such gives rise to jealousy and dissatisfation. Luxuries reduce the incentive and efficiency of worker by encouraging consumption of liquor.
(ii) Consumption of luxury diverts resources from production of essential commodities to inessential commodities. It involves waste of resources.
(iii) It encourages social tension and class conflict. Poor people in society revolt against the luxuries of the rich. Therefore, consumption of luxuries is harmful.
Consumption of luxuries in a poor country like India is doubly harmful because we have no resources to produce necessaries. We can get only resources by reducing consumption and increasing saving. If reduction of consumption is desirable reduction of luxurious consumption is doubly desirable.
Group – C
Objective type Questions with Answers
I. Multiple Choice Questions with Answers :
Question 1.
What is meant by utility in Economics ?
(i) Usefulness of the good
(ii) Want satisfying power of a good
(iii) Desirabity of the good
(iv) All of the above
Answer:
(ii) Want satisfying power of a good
Question 2.
Which of the followings is not the feature of utility ?
(i) utility is subjective
(ii) utility may be cardinal or ordinal
(iii) utility is same as usefulness
(iv) utility is different from, pleasure
Answer:
(iii) utility is same as usefulness
Question 3.
Making a chair from the wood creates ____ utility?
(i) form utility
(ii) place utility
(iii) time utility
(iv) service utility
Answer:
(i) form utility
Question 4.
Storing rice in winter and selling it during rainy season creates ____
(i) place utility
(ii) time utility
(iii) form utility
(iv) none of the above
Answer:
(ii) time utility
Question 5.
Which of the following goods does not create utility ?
(i) Orange
(ii) Curd
(iii) Opium
(iv) None of the above
Answer:
(iv) None of the above
Question 6.
Measurability of utility interms of 1, 2, 3 ……….. shows that
(i) Utility is subjective
(ii) Utility is ordinal
(iii) Utility is cardinal
(iv) All of the above
Answer:
(iii) Utility is cardinal
Question 7.
Which is of the followings is not true ?
(i) Utility can be arranged in order
(ii) Utility is not found in unpleasant goods
(iii) Utility differes from usefulness
(iv) None of the above
Answer:
(ii) Utility is not found in unpleasant goods
Question 8.
Service of a teacher creates
(i) Time utility
(ii) Service utility
(iii) Place utility
(iv) No utility is created
Answer:
(ii) Service utility
Question 9.
Utility varies from person to person this notion indicates that
(i) Utility is objective
(ii) Utility can be measured
(iii) Utility is subjective
(iv) None of the above
Answer:
(iii) Utility is subjective
Question 10.
People consume opium because
(i) It has utility
(ii) It is useful
(iii) It is necessary for life
(iv) All of the above
Answer:
(i) It has utility
Question 11.
Selling the goods of rural area in town creates.
(i) From utility
(ii) Time utility
(iii) Place utility
(iv) Service utility
Answer:
(iii) Place utility
Question 12.
Wealth in Economics refers to
(i) All economic goods
(ii) valuable goods
(iii) Money, gold & diamond
(iv) goods having value in use
Answer:
(i) All economic goods
Question 13.
Which of the following is not wealth ?
(i) Bay of Bengal
(ii) Sun or moon
(iii) The Himalayas
(iv) None of the above
Answer:
(iv) None of the above
Question 14.
Which of the following is not the charactersistic of wealth.
(i) High value in use
(ii) High value in exchange
(iii) Marketability
(iv) External possession
Answer:
(i) High value in use
Question 15.
Wood in the jungle is not wealth because
(i) It has no utility
(ii) It is not transferable
(iii) It is not scarce
(iv) All of the above
Answer:
(iii) It is not scarce
Question 16.
Money is not wealth because
(i) It has no utility
(ii) It can not be transferred
(iii) It is not scarce
(iv) All of the above
Answer:
(i) It has no utility
Question 17.
Diamond is wealth but air sunshine are not wealth because
(i) Diamond has high value in use
(ii) Diamond is scarce in supply
(iii) Air sunshine are gift of nature
(iv) Diamond is very costly.
Answer:
(ii) Diamond is scarce in supply
Question 18.
What type of wealth is your Kisan Vikas Patra?
(i) National wealth
(ii) Potential wealth
(iii) Individual wealth
(iv) Negative wealth
Answer:
(iii) Individual wealth
Question 19.
Which of the followings is not wealth?
(i) Your H.S.C. certificate
(ii) Technical skill
(iii) Honesty
(iv) All of the above
Answer:
(iv) All of the above
Question 20.
Voice of a singer is not wealth because.
(i) It is not transferable
(ii) It is not externally possessed
(iii) It is not marketable
(iv) All of the above
Answer:
(iv) All of the above
Question 21.
Which of the followings is an economic goods though it is a free gift of nature?
(i) Land
(ii) Ocean
(iii) River
(iv) Forests
Answer:
(i) Land
Question 22.
Which of the followings is wealth in Economics?
(i) Voice of Kishore Kumar
(ii) Service of a doctor
(iii) Motor Cycle of your father
(iv) Good health of your brother
Answer:
(iii) Motor Cycle of your father
Question 23.
Price is money value of
(i) Utility
(ii) Value in use
(iii) Value in exchange
(iv) All of the above
Answer:
(iii) Value in exchange
Question 24.
Which is not a feature of human wants?
(i) Wants vary from person to person
(ii) Wants are competitive
(iii) Wants are relative in nature
(iv) None of the above
Answer:
(iv) None of the above
Question 25.
Man and machine describes that
(i) Wants are competitive
(ii) Wants are complementary
(iii) Wants are both competitive and complementary
(iv) None of these
Answer:
(i) Wants are competitive
Question 26.
Which of the followings refers to utility?
(i) usefulness of a good
(ii) pleasure dervided from a good
(iii) wants satisfying power of a good
(iv) All of the above
Answer:
(iii) wants satisfying power of a good
Question 27.
Utility is a an
(i) objective & cardinal concept
(ii) subjective & cardinal concept
(iii) subjective & ordinal concept
(iv) objective & ordinal concept
Answer:
(ii) subjective & cardinal concept
Question 28.
Which of the followings has no utility?
(i) Wine
(ii) Cigarette
(iii) Opium
(iv) None of these
Answer:
(iv) None of these
Question 29.
What type of utility is created if a table is made from a log of wood?
(i) place utility
(ii) time utility
(iii) service utility
(iv) form utility
Answer:
(iv) form utility
Question 30.
What type of utility is created when river water is supplied in the town?
(i) Place utility
(ii) form utility
(iii) service utility
(iv) time utility
Answer:
(i) Place utility
Question 31.
What happens to the utility of a sweater if it is stored during summer & sold during winter?
(i) utility remains same
(ii) utility decreases
(iii) utility increases
(iv) utility first increases then decreases
Answer:
(iii) utility increases
Question 32.
Consumption refers to the
(i) creation of utility
(ii) destruction of utility
(iii) increas in utility
(iv) decrease in the utility
Answer:
(ii) destruction of utility
Question 33.
What type of utility is caused on account of export of a goods?
(i) Time utility
(ii) Place utility
(iii) Form utility
(iv) None of the above
Answer:
(ii) Place utility
Question 34.
A table for a student is a
(i) Producers goods
(ii) Consumers good
(iii) Public goods
(iv) Free goods.
Answer:
(ii) Consumers good
Question 35.
What type of good is your club?
(i) Private goods
(ii) Producers goods
(iii) Public goods
(iv) All of the above
Answer:
(iii) Public goods
Question 36.
For which goods principle of exclusion is not applicable.
(i) Consumers goods
(ii) Public goods
(iii) Producers goods
(iv) Private goods
Answer:
(ii) Public goods
Question 37.
‘Principle of exclusion’ is applicable to
(i) Material goods
(ii) Economic goods
(iii) Private goods
(iv) Public goods
Answer:
(iii) Private goods
Question 38.
A log of teak wood collected from the jungle & used in the city is a
(i) Producers goods
(ii) Free goods
(iii) Economic goods
(iv) Consumers goods
Answer:
(i) Producers goods
Question 39.
What type of good is the service of a doctor?
(i) Consumers goods
(ii) Economic goods
(iii) Service
(iv) None of the above
Answer:
(iii) Service
Question 40.
A goods having value in use but not value in exchange is
(i) Economic goods
(ii) Non-material goods
(iii) Free goods
(iv) All of the above
Answer:
(iii) Free goods
Question 41.
Cotton used for preparing cloth is a
(i) Consumers goods
(ii) Producers goods
(iii) Free goods
(iv) Non-material goods
Answer:
(ii) Producers goods
Question 42.
Goods which yields direct satisfaction is
(i) Producers goods
(ii) Free goods
(iii) Consumers goods
(iv) Private goods
Answer:
(iii) Consumers goods
Question 43.
What type of goods is the mid-day meal supplied to the primary student?
(i) Public goods
(ii) Private goods
(iii) Producers goods
(iv) All of the above
Answer:
(i) Public goods
Question 44.
What type of goods is your personal computer?
(i) Private goods
(ii) Public goods
(iii) Consumers goods
(iv) All of the above
Answer:
(i) Private goods
Question 45.
Goods which are visible, tangible & have a shape is called
(i) Consumers goods
(ii) Private goods
(iii) Material goods
(iv) Non-material goods
Answer:
(iii) Material goods
Question 46.
Which of the followings is not free good?
(i) Air
(ii) Sand
(iii) Mid-day meal to children
(iv) Land
Answer:
(iii) Mid-day meal to children
Question 47.
In economics, wealth means
(i) All the costly items
(ii) All producers goods
(iii) Goods having value in use
(iv) Goods having value in exchange
Answer:
(iv) Goods having value in exchange
Question 48.
The scarcity as a characteristics of wealth refers to
(i) Its demand is scarce in relation to its supply
(ii) Both the demand & supply of it are scarce.
(iii) Its supply is scarce in relation to its demand
(iv) All of the above
Answer:
(iii) Its supply is scarce in relation to its demand
Question 49.
In economics, health is not treated as wealth; because
(i) it has no utility
(ii) it is not scarce
(iii) it can not be marketed
(iv) All of the above
Answer:
(iii) it can not be marketed
Question 50.
What type of wealth is Paradeep Port?
(i) National wealth
(ii) Personal wealth
(iii) Cosmopolitan wealth
(iv) None of the above
Answer:
(i) National wealth
Question 51.
What type of wealth is money ?
(i) National wealth
(ii) International wealth
(iii) Personal wealth
(iv) None of the above
Answer:
(iv) None of the above
Question 52.
Why is not money treated as wealth ?
(i) It has no value in use
(ii) It has no value-in-exchange
(iii) It is not transferable
(iv) All of the above
Answer:
(i) It has no value in use
Question 53.
What type up wealth is the cheque drawn on a nation ?
(i) Personal wealth
(ii) National wealth
(iii) International wealth
(iv) Consumption wealth
Answer:
(i) Personal wealth
Question 54.
A milk man bringing milk from the village to the city’ creates
(i) place utility
(ii) time utility
(iii) form utility
(iv) both (i) and (ii)
Answer:
(i) place utility
Question 55.
The value of comodity expressed in terms of money is called
(i) usefulness
(ii) utility
(iii) price
(iv) both (i) and (ii)
Answer:
(iii) price
Question 56.
Sand on the sea shore is not wealth because it lacks
(i) utility
(ii) scarcity
(iii) marketability
(iv) external Possession
Answer:
(ii) scarcity
Question 57.
Air is not treated as wealth because it does not have
(i) utility
(ii) scarcity
(iii) marketability
(iv) both (i) and (ii)
Answer:
(ii) scarcity
Question 58.
In Economics, value of a good refers to
(i) utility
(ii) value-in-use
(iii) value-in-exchange
(iv) All of the above
Answer:
(iii) value-in-exehange
Question 59.
Under what type of wealth can the invention of a scientist of a nation be included ?
(i) Personal wealth
(ii) International wealth
(iii) National wealth
(iv) Not wealth at all
Answer:
(iii) National wealth
Question 60.
The number of goods which can be commanded in exchange of a particular goods shows,
(i) utility
(ii) exchange value
(iii) value-in-use
(iv) both (i) and (ii)
Answer:
(ii) exchange value
Question 61.
One rupee coin is not wealth because it has no
(i) utility
(ii) value-in-use
(iii) value-in-exchange
(iv) Both (i) and (ii)
Answer:
(iv) Both (i) and (ii)
Question 62.
Your H. S. C. certificate cannot be treated as wealth in economics because it has no
(i) utility
(ii) scarcity
(iii) transferability
(iv) All of the above
Answer:
(iii) transferability
Question 63.
The desire for the possession of a commodity is known as
(i) demand
(ii) effective desire
(iii) human wants
(iv) None of the above
Answer:
(iii) human wants
Question 64.
Effective desire indicates
(i) willingness to buy
(ii) ability to pay
(iii) willingness to spend
(iv) All of the above
Answer:
(iv) All of the above
Question 65.
Wants of car can be satisfied with the satisfaction of wants of petrol; it shows the feature that
(i) wants are competitive
(ii) wants are complementary
(iii) wants are both competative
(iv) All of the above
Answer:
(ii) wants are complementary
Question 66.
A hungry man can satisfy his wants either by taking rice or bread ; it shows the feature that
(i) wants are complementary
(ii) wants are alternative
(iii) wants are competitive
(iv) wants are recurring
Answer:
(ii) wants are alternative
Question 67.
The satisfaction of wants like wine is the type of
(i) luxuries
(ii) comforts
(iii) necessaries for efficiency
(iv) conventional necessaries
AnsWER:
(iv) conventional necessaries
Question 68.
A car for a student is a
(i) Necessary for efficiency
(ii) comforts
(iii) luxury
(iv) conventional necessary
Answer:
(iii) luxury
Question 69.
A pen for a student is
(i) Necessary
(ii) comforts
(iii) luxury
(iv) conventional necessary
Answer:
(i) Necessary
Question 70.
The consumption of luxuries is justified because
(i) it increases the efficiency of the consumer
(ii) it increases the employment
(iii) it leads to social welfare
(iv) all of the above
Answer:
(ii) it increases the employment
II. Fill in the blanks :
Question 1.
Human wants are ____
Answer:
Unlimited
Question 2.
All ____ may rise or fall together, but not values.
Answer:
Prices
Question 3.
Air in Puri sea beach is an example of ____ goods.
Answer:
Free
Question 4.
Your Fountain Pen is an example of ____ wealth.
Answer:
Personal
Question 5.
The desire to have a thing is called ____
Answer:
Wants
Question 6.
Man and machine are both complementary and ____
Answer:
Competitive
Question 7.
Chewing pan is an example of ____
Answer:
Conventional necessary
Question 8.
An electric fan in summer season is an example of ____
Answer:
Comfort
Question 9.
____ arise due to scarcity of resources and unlimited nature of human wants.
Answer:
Economic problems
Question 10.
According to ____ Economics is a study of mankind in the ordinary business of life.
Answer:
Marshall
Question 11.
All the human wants are not ____ important.
Answer:
Equally
Question 12.
Resources are of ____ uses.
Answer:
Alternative uses.
Question 13.
Utility is a ____ concepts
Answer:
Subjective
Question 14.
Cuttack Paradip Road is a ____ wealth
Answer:
National
Question 15.
Pasific ocean is an example of ____ wealth
Answer:
International
Question 16.
Wants of Pen and Ink is said to be ____
Answer:
Complementary
Question 17.
Feast in the marriage is ____ necessary
Answer:
Conventional
Question 18.
Your Matriculation certificate is not wealth because it is not ____
Answer:
Transferable
Question 19.
The transportation of goods by a truck driver causes ____ utility
Answer:
Service
Question 20.
The chair made from a log of wood is an example of ____ utility
Answer:
Form Utility
Question 21.
The Ice cream consumed during summer creates ____ utility
Answer:
Time
Question 22.
Selling the vegetables in the town by transporting it from rural areas creates ____ utility
Answer:
Place
Question 23.
According to Marshall Utility is measurable in terms of ____
Answer:
Money
Question 24.
The voice of Lata Mangeskar is not considered to be wealth because it lacks ____
Answer:
External Possession
Question 25.
The treatment of doctor is an example of ____utility
Answer:
Service
III. Correct the Sentences :
Question 1.
Utility is objective
Answer:
Incorrect.
Correct: Utility is subjective
Question 2.
Wine has no utility.
Incorrect.
Correct: Wine has no usefulness
Question 3.
Utility is the effect of consumption and satisfaction is the cause of the consumption.
Answer:
Incorrect.
Correct: Utility is the cause of consumption and satisfaction is the effect of consumption.
Question 4.
Water supplied from a river to a city creates form utility.
Answer:
Incorrect.
Correct: Water supplied from a river to a city creates place utility.
Question 5.
If a good is stored and sold later on it creates form utility.
Answer:
Incorrect.
Correct: If a good is stored and sold later on it creates time utility.
Question 6.
Making of a chair from a log of wood is an example of time utility.
Answer:
Incorrect.
Correct: Making of a chair from a log of wood is an example of form utility.
Question 7.
Treatment made by a doctor is a case of time utility.
Answer:
Incorrect.
Correct: Treatment made by a doctor is a case of service utility.
Question 8.
Services are non-material goods.
Answer:
Correct.
Question 9.
All goods are free gift of nature.
Answer:
Incorrect.
Correct: Only free goods are free gift of nature.
Question 10.
The supply of free goods is scarce in relation to its demand.
Answer:
Incorrect.
Correct: The supply of free goods is abundant in relation to its demand.
Question 11.
Free goods does not have value-in-exchange.
Answer:
Correct
Question 12.
Water supplied in a city is a free goods.
Answer:
Incorrect.
Correct: Water supplied in a city is an economic goods.
Question 13.
The supply of economic goods are scarce.
Answer:
Correct.
Question 14.
Consumers goods are used for further production.
Answer:
Incorrect.
Correct: Producers goods are used for further production.
Question 15.
Producers goods satisfy the human wants directly.
Answer:
Incorrect.
Correct: Consumers goods satisfy the human wants directly.
Question 16.
Intermidiate goods are either consumed or used for resale.
Answer:
Incorrect.
Correct: Final goods are either consumed or used for resale.
Question 17.
Intermediate goods are used for further production.
Answer:
Correct.
Question 18.
The Principle of exclusion is applicable to public goods.
Answer:
Incorrect.
Correct: The Principle of exclusion is applicable to private goods.
Question 19.
The supply of private goods leads to collective welfare.
Answer:
Incorrect.
Correct: The supply of public goods leads to collective welfare.
Question 20.
National Highway is a public goods.
Answer:
Correct.
Question 21.
All the goods are wealth.
Answer:
Incorrect.
Correct: Only the economic goods are wealth.
Question 22.
Wealth has only value-in-use.
Answer:
Incorrect.
Correct: Wealth has value in use and value in exchange.
Question 23.
Money is wealth.
Answer:
Incorrect.
Correct: Money is title to wealth.
Question 24.
Health is wealth.
Answer:
Incorrect.
Correct: Health is not wealth.
Question 25.
Cheque & Draft are wealth.
Answer:
Incorrect.
Correct: Cheque and draft are representative wealth.
Question 26.
Park is an individual wealth.
Answer:
Incorrect.
Correct: Park is a social wealth.
Question 27.
Bay of Bengal is a national wealth.
Answer:
Incorrect.
Correct: Bay of Bengal is an international wealth.
Question 28.
Good will of a business is not wealth.
Answer:
Incorrect.
Correct: Good-will of a business is an individual wealth.
Question 29.
Borrowings of an individual is an individual wealth.
Answer:
Incorrect.
Correct: Borrowing of an individual is a negative wealth.
Question 30.
All wealth is capital.
Answer:
Incorrect.
Correct: All capital is wealth.
Question 31.
Wealth is a flow but income is a stock.
Answer:
Incorrect.
Correct: Wealth is a stock but income is a flow.
Question 32.
Capital is a part of wealth.
Answer:
Correct.
Question 33.
Value in economics refers to value-in-use.
Answer:
Incorrect.
Correct: Value in economics refers to value-in exchange.
Question 34.
Value-in-exchange indicates price.
Answer:
Correct.
Question 35.
Value of all commodities change simultaneously: but price of different goods remain uncharged.
Answer:
Incorrect.
Correct: Price of different commodities change simultaneously; but value of all goods remain unchanged.
Question 36.
Wants have same intensity.
Answer:
Incorrect.
Correct: Wants vary in intensity.
Question 37.
Wants never change with time, place and person.
Answer:
Incorrect.
Correct: Wants vary with time place and person.
Question 38.
News paper for a teacher is comfort.
Answer:
Incorrect.
Correct: News paper for a teacher is necessaries.
Question 39.
Habit of smoking is necessaries for efficiency.
Answer:
Incorrect.
Correct: Habit of smoking is conventional necessaries.
Question 40.
Medicine for patient is necessaries.
Answer:
Correct.
Question 41.
Wine for a drunkard is necessaries for life.
Answer:
Incorrect.
Correct: Wine for a drunkard is conventional necessaries.
Question 42.
Tea is a necessaries for efficiency.
Answer:
Incorrect.
Correct: Tea is a conventional necessaries.
IV. Answer the following questions in one word :
Question 1.
What is utility ?
Answer:
Utility refers to wants satisfying power of a goods.
Question 2.
State a peculiarity of ‘Utility.’
Answer:
Utility is a subjective concept.
Question 3.
Give an example of a goods which has utility but does not have usefulness.
Answer:
Alcohol has utility but does not have usefulness.
Question 4.
What is form utility ?
Answer:
If the utility of a goods increases with the change of its form, it is called form utility.
Question 5.
What is place utility ?
Answer:
If the utility of a goods increases with the change of place, it is called place utility.
Question 6.
What type of utility is created if a log of wood is converted into a table ?
Answer:
Form utility is created if a log of wood is converted into table.
Question 7.
Give an example of place Utility ?
Answer:
If the water collected from the river is supplied in the city, it is called ‘place utility’.
Question 8.
What is service utility ?
Answer:
The service of a person, if satisfies the wants of other it is called service utility.
Question 9.
Give an example of service utility ?
Answer:
Service of a doctor is called ‘service utility.’
Question 10.
What type of utility is created if one goods is stored and sold later on ?
Answer:
Time utility is created if one goods is stored & sold later on.
Question 11.
What is goods ?
Answer:
Anything which satisfies the human wants is called goods.
Question 12.
What is the difference between goods & services ?
Answer:
Goods may be viewed as both the commodities which are visible, tangible & having a shape but services which are invisible, intangible & do not have any shape.
Question 13.
Which goods does not have value-in-exchange ?
Answer:
Free goods does not have value in-exchange.
Question 14.
What is economic goods ?
Answer:
Economic goods are those goods which are possessed with the payment of price & have both value-in-use & value in-exchange.
Question 15.
Give an example of economic goods which is a free gift of nature ?
Answer:
Land is an economic goods which is a free gift of nature.
Question 16.
What is consumers’ goods ?
Answer:
Consumers’ goods are those goods which can satisfy the human wants directly.
Question 17.
What is producers’ goods ?
Answer:
The goods which are used for further production is called producers’ goods.
Question 18.
Give an example of producers goods ?
Answer:
Machine is an example of producers’ goods.
Question 19.
Which goods are used for further production ?
Answer:
Producers’ goods are used for further production.
Question 20.
Which goods are called goods of first order ?
Answer:
Consumers’ goods are called goods of first order.
Question 21.
What is intermediate goods ?
Answer:
The goods which are used for producing goods is called intermediate goods.
Question 22.
What is final goods ?
Answer:
Goods which can be directly used for consumption or for resale is called final goods.
Question 23.
Which are the features of private goods ?
Answer:
Private goods are those goods whose consumption is rival and excludable and also owned by private individuals.
Question 24.
To which goods, the principle of exclusion is applied ?
Answer:
Principle of exclusion is applied to private goods.
Question 25.
What is wealth in economics ?
Answer:
In Economics, wealth refers to all economic goods.
Question 26.
What are the characteristics of wealth ?
Answer:
Utility, scarcity, transferability & external possession are the features of wealth.
Question 27.
Which characteristics of wealth shows its marketability ?
Answer:
The features like transferability shows the marketability of wealth.
Question 28.
Why health is not treated as wealth in economics ?
Answer:
Health does not satisfy the features of wealth like transferability & external possession.
Question 29.
Is money wealth ?
Answer:
Money is not wealth because it does not have utility of its own.
Question 30.
What type of wealth is cheque, shares and bonds ?
Answer:
Cheque, share & bonds are representative wealth.
Question 31.
Give an example of national wealth ?
Answer:
Hirakud Dam is an example of national wealth.
Question 32.
What type of wealth is U.N.O ?
Answer:
U.N.O. is a cosmopolitan wealth.
Question 33.
What type of wealth is Rourkela Steel Plant ?
Answer:
Rourkela Steel plant is a national wealth.
Question 34.
What type of wealth is a club ?
Answer:
A club is a social wealth.
Question 35.
What is value in economics ?
Answer:
Value in economics refers to value in exchange.
Question 36.
What is Price ?
Answer:
Value-in-exchange expressed in terms of money is called price.
Question 37.
What is value in exchange.
Answer:
Value in exchange refers to what a commodity can purchase in terms of other commodity.
Question 38.
What type of wealth is business good-will ?
Answer:
Business good will is an individual wealth.
Question 39.
Why air is not wealth ?
Answer:
As air is not scarce, it is not called wealth.
Question 40.
What type of wealth is river Mahanadi ?
Answer:
River Mahanadi is a national wealth.
Question 41.
What is human wants ?
Answer:
The desire for the possession of a goods is called human wants.
Question 42.
What is complementary goods ?
Answer:
There are some goods which are simultaneously consumed for the satisfaction of a wants are called complementary goods.
Question 43.
What are the necessaries ?
Answer:
Necessaries are those goods which are the basic needs of life.
Question 44.
What is conventional necessaries ?
Answer:
Those necessaries which arise out of the social convention are called conventional necessaries.
Question 45.
What type of wants is car for a doctor ?
Answer:
Car for a doctor is necessaries for efficiency.
Question 46.
What are comforts ?
Answer:
Comforts are those goods which make life comfortable.
Question 47.
What type of wants is wine for a drunkard ?
Answer:
Wine for a drunkard is a conventional necessaries.
Question 48.
What type of wants is a grand feast for marriage ?
Answer:
A Grand feast for marriage is a conventional necessaries.
Question 49.
What type of want is smoking for a smoker ?
Answer:
Conventional necessaries
Question 50.
What type of want is a car for a student ?
Answer:
A car for a student is luxury.
Question 51.
Why an aeroplane is not treated as wants for a poor man ?
Answer:
An aeroplane is not a want for a poor man because he does not have adequate purchasing power for it.