Economic Thought

 UNIT 7

          ECONOMIC THOUGHT

1. Define production.

Production is a process of creating goods and services for satisfying human wants.

 2. List out any three examples for production of goods and provision of services

*Production of goods*:

 Agriculture, Mining and factory work.

*Provision of services*:

Traffic police, teacher and the doctor

3. What are the 4 factors of production? Write its rewards. 

Land - Rent

 Labour - Wages

Capital - Interest

Organisation  - Profit

4. There is a correlation between production, distribution and consumption of goods and services. Justify this statement.

* Man satisfies his wants through the consumption of goods and services.

* The reward received by participating in the production process is spent on consumption.

* Fair distribution speeds up economic development.

5. Define Economics? Write its importance.

* Economics is the branch of science that studies economic activities relating to production, distribution, and consumption.

* It is also a study of man and society.

* Its study enables us to find solutions to socio-economic problems and to understand the emerging world economic conditions.

6. What are the three essential questions associated with every economic activity.

    a) What to produce and how much to produce?

    b) How to produce?

    c)For whom to produce?

7. Explain " *What to produce and how much to produce*".

Resources are limited, it is very important to use the available ones and to decide what to produce for the welfare of the society

8. What do you mean by ' *How to produce* ?'

* Denotes the method of production.

* Decided on the basis of the availability of resources and technology.

* Varies with the availability of resources.

9. Explain " *For whom to produce* ".

 

* It is important to prioritize our wants.

* Benefits the maximum number of individuals in the society.

* How the income generated is distributed.

 10. Who was known as the Father of Economics?

➡️ Adam Smith

11. Who was the author of the article ‘An Enquiry into the Nature and Causes of the Wealth of Nations’.

➡️  Adam Smith

12. Who put forward the theory 'Laissez Faire'? Explain

➡️  Adam Smith

➡️ Limited government intervention in the economic activities

➡️  More freedom to individuals.

13. What were the ideas put forward by Karl Marx which benefited the growth of Economics.

➡️  Gave importance to the role of labourers in the production process.

➡️  The basis of production is the manpower of labourers and that the price of a product is the reward for it.

➡️  No difference between the ''haves'' and the ''have-nots''.

14. What did the term ‘Surplus Value’ mean according to Karl Marx

➡️ The basis of production is the manpower of labourers and that the price of a product is them 

reward for it.

➡️  The labourers get only a portion while the lion's share goes to the capitalist as profit. Marx 

calls this surplus value

15. Name the magnum opus written by Karl Marx

➡️  'Das Capital'.

16. Write short note about the principles of Alfred Marshall

➡️  Wealth should ultimately result in the welfare of the society.

➡️  Economic activities must be welfare oriented.

17. Name the famous work of Alfred Marshall

➡️  'Principles of Economics'.

18. Write the views of Lionel Robbins in Economics

➡️  We should prioritize our wants for the judicious utilization of limited resources.

19. What were the points put forward by Paul A Samuelson in Economics?

➡️  A nation's financial stability depends on efficient economic planning and proper utilization of 

resources.

 Drain Theory

►Dadabhai Naoroji.

2.Define Drain Theory.

►The Britishers were draining our resources and that this led to economic crisis and 

poverty. 

►This is known as the Drain Theory.

3.According to Dadabhai Naoroji what were the reasons for the drain of resources in

India?

►The British officers in India were paid high salaries.

►Goods made from Indian raw materials and resources bought at extremely low price 

were sold at a high price in the Indian market.

►Indian wealth was robbed for expanding the British Empire.

►Indian labourers were treated as slaves and farm and industrial products were exported 

to England.

4.Write short note about Gandhian Economic thoughts.

►Gave importance to moral values and rural economy. 

►His idea of 'trusteeship' led to fresh thoughts in the area. 

►Aimed at an economy which is founded on truth and non-violence.

►Priority to rural-agricultural system.

►Emphasis on small and cottage industries.

►Formation of an economy built on equality.

►A self sufficient and self-reliant local economy.

5. Explain the main ideas of Gandhiji's 'trusteeship'

►Wealth as a trustee of the public.

► A trustee has no other heir but the public.

►The nature of production is decided by the society and not by the individual's choice or 

greed.

►There must be a limit to maximum wage as well as minimum wage.

6.Name the first book of Mahatma Gandhi.

►'Hind Swaraj'(1909)

7.What were the economic ideas put forward by Amartya Sen?

►His major works covered vast areas like welfare economics, economic inequality, and 

development.

►He pointed out the flaws in determining the poverty line and concentrated his studies on 

poverty, inequality, and famine.

8. Indian Economic Thinkers and their ideologies.

►Chanakya - Prevention of income loss and effective economic performance.

►Amartya Sen - Welfare Economics

►Dadabhai Naoroji - Drain Theory

►Mahatma Gandhi - Trusteeship