Chapter 1 Basic Concepts in Economics Solutions

(i) Utility: Utility means the capacity of a commodity to satisfy a human want. A commodity must have to want satisfying power. E.g. books, calculators, etc. have utility. So they are regarded as wealthy.

(ii) Scarcity: A commodity is called wealth, if it is scarce in supply then its demand. All economic goods are considered as wealth because the price is paid for them due to scarcity.

(iii) Transferability: A commodity is called wealth if it can be transferred from one person to another. It includes material or tangible goods. E.g. furniture, car, etc.

(iv) Externality: A commodity is regarded as wealth only if it has externality i.e. it must be external to the human body. E.g. computer.
(In the case of transferability, Physical transferability means the actual transfer of goods from one person to another. Whereas, notional transferability refers to the transfer of ownership rights. E.g. land, building, etc.) Internal qualities of human beings like voice, beauty, etc. are neither external nor transferable. So they are not wealthy in an economic sense.

Characteristics of wants are as follows:

5. State with reasons whether you agree or disagree with the following statements:

6. Answer in detail:

Concepts of Macro Economics.

11th Economics Digest Chapter 1 Basic Concept in Economics Intext Questions and Answers

Do you know? [Textbook Page. No. 1]

Who was Kautilya?
Answer:
Kautilya was a great statesman, philosopher, economist, and royal advisor during the Mourya period. He is also known as ‘Chanakya’ or ‘Vishnugupta’. He wrote a book called ‘Arthashastra’.

Do you know? [Textbook Page. No. 2]

(a) Who contributed to the field of Environmental Economics?
Answer:
Mr. Nordhaus contributed to the field of Environmental Economics.

(b) Who won Nobel Memorial Prize in Economics for 2018?
Answer:
Paul Romer and William Nordhaus won Nobel Memorial Prize in Economics for 2018.

Find out: [Textbook Page No. 2]

Other Nobel Prize winners in Economics.
Answer:
Nobel Prize Winners (2010 – 2017)

Do you know? [Textbook Pg. No. 2]

Name the economist belonging to:

Answer:

Find out. [Textbook Page No. 4]

Which of the following is ‘free good’ or ‘economic good’?

Answer:

Do you know? [Textbook Page No. 5]

What do you mean by Physical transferability and Notional transferability?
Answer:
Physical transferability: When goods can be actually transferred from one person to another and from one place to another place it has physical transferability. E.g. Motor Car, Furniture, Machinery, etc. Notional transferability: When goods cannot be actually transferred physically it has notional transferability. E.g. Land, Building, etc.

Try this: [Textbook Page No. 5]

Prepare a list of commodities that satisfy the condition of physical transferability and notional transferability.
Answer:

Do you know? [Textbook Page No. 5]

Why are inborn qualities not considered wealth?
Answer:
Inborn qualities like beauty, melodious voice, etc. are not considered as wealth because they do not possess all the features of wealth like – externality and transferability.

You Should Know? [Textbook Page No. 5]

Explain various types of income?
Answer:

Always remember [Textbook Page No. 6]

What activities are considered ‘unproductive’?
Answer:
Activities that are carried out just for sake of charity or hobby or where no monetary exchange takes place are considered as ‘unproductive’ activities.

Do you know? [Textbook Page No. 7]

What is ‘Cyclical Unemployment’?
Answer:
Unemployment created due to the impact of cyclical fluctuations is called ‘Cyclical Unemployment. It occurs due to inflation and depression in the economy.

Find out: [Textbook Page No. 7]

Which of the following terms is a part of microeconomics or macroeconomics?

Answer:

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