Balbharti Maharashtra State Board Class 11 Economics Solutions
Chapter 1 Basic Concept in Economics Textbook Exercise Questions and Answers.
1. Choose the correct option:
Question 1.
Statements related to Economics:
(a) Economics is a social science.
(b) Concept of economics is derived from the Greek word ‘Oikonomia’.
(c) Economics is related to the study of human economic behaviour.
(d) Economics is related to the management of the household.
Options:
(1) a, b and c
(2) a and b
(3) b and c
(4) a, b, c, and d
Answer:
(1) a, b and c
Question 2.
Statements incorrect with reference to Adam Smith’s definition:
(a) Adam Smith is a classical economist.
(b) Wealth of Nations is authored by Adam Smith.
(c) Economics is the science of wealth.
(d) Economics studies common man.
Options:
(1) d
(2) a, b and c
(3) a and d
(4) c and d
Answer:
(1) d
Question 3.
Key points in Lionel Robbins’ definition:
(a) Wants are unlimited
(b) Means are limited
(c) Wants are not gradable
(d) Means have alternative uses.
Options:
(1) a and b
(2) b and c
(3) a, b and d
(4) a, b, c, and d
Answer:
(4) a, b, c, and d
Question 4.
Statements related to wealth:
(a) Wealth means anything which has market value and can be exchanged for money.
(b) It is external to a human beings.
(c) Wealth has no utility.
(d) Wealth is scarce and exchangeable.
Options:
(1) a, b and d
(2) a, c and d
(3) b, c, and d
(4) None of the above
Answer:
(1) a, b and d
Question 5.
Aspects considered in National Income:
(a) Final goods and services are included in national income.
(b) Produced goods in a financial year are included in national income.
(c) Double counting is avoided.
(d) Value is considered as per market price.
Options:
(1) a and c
(2) b and c
(3) a, c and d
(4) a, b, c, and d
Answer:
(3) a, c and d
2. Complete the correlation:
Question 1.
Natural sciences : Exact sciences : : Social sciences : ___________
Answer:
Abstract/Inexact Sciences
Question 2.
Physics : ___________ : : Psychology : Social Science
Answer:
Natural Science
Question 3.
Arthashastra : Kautilya : : Wealth of Nations : ___________
Answer:
Adam Smith
Question 4.
Necessity : ___________ : : Comforts : Washing machine
Answer:
Food
Question 5.
Free goods : Value-in-use : : Economic goods : ___________
Answer:
Value-in-exchange
3. Identify and explain the concepts from the given illustrations:
Question 1.
My father purchased a two-wheeler vehicle. This helps to fulfill my travel needs.
Answer:
Comfort Want.
Comforts are those wants that make our life comfortable. In the above illustration, the purchase of a two-wheeler vehicle will make my travel easier. It is not a necessity, it is for my comfort.
Question 2.
A study of the annual income of the family of Ramesh.
Answer:
Micro Economic – Personal Income
Microeconomics is the study of particular firms, particular households’ individual prices, wages, incomes, individual industries, particulars commodities. In the above illustration, since it is a study of individual families, it will rightly be said as microeconomic and form the part of Personal Income.
Question 3.
As per the data for the financial year 2018-19, the country’s production of goods and services increased by 20%.
Answer;
Economic Growth.
Economic growth means an increase in the real national income of the country. In the above illustration, since the country’s production of goods and services has increased, it is rightly said to be economic growth.
Question 4.
Karuna’s mother saves ₹ 1000/- every month out of her given salary.
Answer:
Savings.
Saving is a part of income, which is kept aside to meet future needs. In the above illustration, since Karuna’s mother is foregoing her current consumption, it forms part of her savings.
Question 5.
Ram’s father utilized his provident fund amount to set up the grocery store.
Answer:
Investment.
Investment refers to the creation of capital assets through mobilisation of savings. In the above case, Mr. Ram’s father mobilises his savings of provident fund into a business of grocery store, which is called as Investment.
4. Answer the following:
Question 1.
Explain the features of wealth.
Answer:
In economics, wealth is anything that has market value and which commands a price.
Wealth is a commodity that can be exchanged for money.
A commodity must possess the following features to be considered wealth.
(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.
Question 2.
Explain the characteristics of human wants.
Answer:
In the ordinary sense, the word, ‘want,’ and ‘need’ are considered as same. But, in economics, a need is something that is necessary for survival whereas, want is the expression of lack of satisfaction. It enables the person to satisfy his want.
Characteristics of wants are as follows:
5. State with reasons whether you agree or disagree with the following statements:
Question 1.
All wants can be satisfied at a time.
Answer:
No, I do not agree with the statement.
Question 2.
Human wants change as per the seasons and preferences.
Answer:
Yes, I agree with the statement.
Question 3.
Value-in-use and Value-in-exchange are the same.
Answer:
No, I do not agree with the statement.
6. Answer in detail:
Question 1.
Explain the basic concepts of macroeconomics.
Answer:
Macroeconomics is the study of aggregates covering the entire economy like total employment, national income, national output, total investment, total savings, total consumption, aggregate supply, aggregate demand, general price level, etc.
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:
Read More: BANKNIFTY Pivot Calculator
Chapter 1 Basic Concept in Economics Textbook Exercise Questions and Answers.
1. Choose the correct option:
Question 1.
Statements related to Economics:
(a) Economics is a social science.
(b) Concept of economics is derived from the Greek word ‘Oikonomia’.
(c) Economics is related to the study of human economic behaviour.
(d) Economics is related to the management of the household.
Options:
(1) a, b and c
(2) a and b
(3) b and c
(4) a, b, c, and d
Answer:
(1) a, b and c
Question 2.
Statements incorrect with reference to Adam Smith’s definition:
(a) Adam Smith is a classical economist.
(b) Wealth of Nations is authored by Adam Smith.
(c) Economics is the science of wealth.
(d) Economics studies common man.
Options:
(1) d
(2) a, b and c
(3) a and d
(4) c and d
Answer:
(1) d
Question 3.
Key points in Lionel Robbins’ definition:
(a) Wants are unlimited
(b) Means are limited
(c) Wants are not gradable
(d) Means have alternative uses.
Options:
(1) a and b
(2) b and c
(3) a, b and d
(4) a, b, c, and d
Answer:
(4) a, b, c, and d
Question 4.
Statements related to wealth:
(a) Wealth means anything which has market value and can be exchanged for money.
(b) It is external to a human beings.
(c) Wealth has no utility.
(d) Wealth is scarce and exchangeable.
Options:
(1) a, b and d
(2) a, c and d
(3) b, c, and d
(4) None of the above
Answer:
(1) a, b and d
Question 5.
Aspects considered in National Income:
(a) Final goods and services are included in national income.
(b) Produced goods in a financial year are included in national income.
(c) Double counting is avoided.
(d) Value is considered as per market price.
Options:
(1) a and c
(2) b and c
(3) a, c and d
(4) a, b, c, and d
Answer:
(3) a, c and d
2. Complete the correlation:
Question 1.
Natural sciences : Exact sciences : : Social sciences : ___________
Answer:
Abstract/Inexact Sciences
Question 2.
Physics : ___________ : : Psychology : Social Science
Answer:
Natural Science
Question 3.
Arthashastra : Kautilya : : Wealth of Nations : ___________
Answer:
Adam Smith
Question 4.
Necessity : ___________ : : Comforts : Washing machine
Answer:
Food
Question 5.
Free goods : Value-in-use : : Economic goods : ___________
Answer:
Value-in-exchange
3. Identify and explain the concepts from the given illustrations:
Question 1.
My father purchased a two-wheeler vehicle. This helps to fulfill my travel needs.
Answer:
Comfort Want.
Comforts are those wants that make our life comfortable. In the above illustration, the purchase of a two-wheeler vehicle will make my travel easier. It is not a necessity, it is for my comfort.
Question 2.
A study of the annual income of the family of Ramesh.
Answer:
Micro Economic – Personal Income
Microeconomics is the study of particular firms, particular households’ individual prices, wages, incomes, individual industries, particulars commodities. In the above illustration, since it is a study of individual families, it will rightly be said as microeconomic and form the part of Personal Income.
Question 3.
As per the data for the financial year 2018-19, the country’s production of goods and services increased by 20%.
Answer;
Economic Growth.
Economic growth means an increase in the real national income of the country. In the above illustration, since the country’s production of goods and services has increased, it is rightly said to be economic growth.
Question 4.
Karuna’s mother saves ₹ 1000/- every month out of her given salary.
Answer:
Savings.
Saving is a part of income, which is kept aside to meet future needs. In the above illustration, since Karuna’s mother is foregoing her current consumption, it forms part of her savings.
Question 5.
Ram’s father utilized his provident fund amount to set up the grocery store.
Answer:
Investment.
Investment refers to the creation of capital assets through mobilisation of savings. In the above case, Mr. Ram’s father mobilises his savings of provident fund into a business of grocery store, which is called as Investment.
4. Answer the following:
Question 1.
Explain the features of wealth.
Answer:
In economics, wealth is anything that has market value and which commands a price.
Wealth is a commodity that can be exchanged for money.
A commodity must possess the following features to be considered wealth.
(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.
Question 2.
Explain the characteristics of human wants.
Answer:
In the ordinary sense, the word, ‘want,’ and ‘need’ are considered as same. But, in economics, a need is something that is necessary for survival whereas, want is the expression of lack of satisfaction. It enables the person to satisfy his want.
Characteristics of wants are as follows:
5. State with reasons whether you agree or disagree with the following statements:
Question 1.
All wants can be satisfied at a time.
Answer:
No, I do not agree with the statement.
Question 2.
Human wants change as per the seasons and preferences.
Answer:
Yes, I agree with the statement.
Question 3.
Value-in-use and Value-in-exchange are the same.
Answer:
No, I do not agree with the statement.
6. Answer in detail:
Question 1.
Explain the basic concepts of macroeconomics.
Answer:
Macroeconomics is the study of aggregates covering the entire economy like total employment, national income, national output, total investment, total savings, total consumption, aggregate supply, aggregate demand, general price level, etc.
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)
| Year | Noble Prize Winners |
| 2010 | Dale T. Mortensen, Christopher A. Pissarides, Peter Diamond |
| 2011 | Thomas J. Sargent, Christopher A. Sims |
| 2012 | Alvin E. Roth, Lloyd Shapley |
| 2013 | Robert J. Shiller, Eugene Fama, Lars Peter Hansen |
| 2014 | Jean Tirole |
| 2015 | Angus Deaton |
| 2016 | Bengt Holmstrom, Olive Hart |
| 2017 | Richard Thaler |
| 2018 | William Nordhaus, Paul Romer |
| 2019 | Abhijit Banerjee, Esther Duflo, Michael Kremer |
| 2020 | Paul Milgrom, Robert B. Wilson |
Name the economist belonging to:
| Classical School of Thought of 18th century | Neo-classical School of Thought of 19th and 1st half of 20th century | Modern School of Thought from 20th century till date. |
| Classical School of Thought of 18th century | Neo-classical School of Thought of 19th and 1st half of 20th century | Modern School of Thought from 20th century till date. |
| Adam Smith, David Ricardo, J. S. Mill, T. R. Malthus, etc. | Alfred Marshall, A. C. Pigou, Irving Fisher, etc. | J. M. Keynes, Lionel Robbins, Paul Samuelson, etc. |
Which of the following is ‘free good’ or ‘economic good’?
Answer:
| Free Good | Economic Good |
| Water in river Sunshine Air |
Oxygen in cylinder Water processed for drinking |
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:
| Commodities having Physical Transferability | Commodities having Notional Transferability |
| Motor Car Furniture Machinery Consumer goods |
Land Building Premises |
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:
| Micro Economics | Macro Economics |
| Price of a commodity Profits of a firm |
Global Poverty Balance of payments National Income |