1.Production of gift packs one week before Diwali falls in which period?

Production of gift packs during Diwali  season will fall under short period.One week before Diwali is a short period.In this period,only variable factor like material, labour etc.can be increased. Fixed factor like new plant and machinery cannot be increased. Hence, production fall in short period during Diwali season.

2. Name the principal factors of production in a modern economy.

The factors which carry out the process of production are called the factors of production. Economist talk about four factors of production land,labour ,capital and organization [By land, we mean not only the land surface but all gift of nature. The supply of land in a country is given by nature. Labour supply is given by the population of the country. By capital, we mean the produced means of production, for instances machines, factory sheds as well as the others non labour. Inputs like raw materials are regarded as capital. By organization or enterprise we mean the services performed by the entrepreneurs. The entrepreneurs co-ordinate the activities of the other agents of production in land, labour and capital. They also bear the risk of business].

3. Production may indicate the creation of time utility.Explain.

Production can be defined as the creation utility. Such utility can be created by making some stock of goods at one time period and by supplying the same at another time period. It is called the creation of time utility’ For example, the owner of a cold storage can create such time utility (By providing the farmers storage facility for food crops just after the harvesting season).

4. An individual purchase a commodity from a distant market and sells it to another market. Do you consider this activity as production?

      This activity of that individual (he may be a whole – seller of the commodity) is considered as production because he is creating place utility by changing the location of that commodity. That is to say, he is transporting that commodity from the place of its production to another market place where its supply is scarce (for the benefit of the consumers)

5. Define land.

         In economics, the word land is defined to include not only the surface of the earth but also all other free gifts of nature. For instance, mineral, resources forest resources and indeed any thing that helps us to carry out the production of goods and services, but is provided by nature free of cost.

6. Land is a peculiar factor of production. Explain this statement with the help of any two examples.

        Land as a factor of production has several peculiar characteristics. Two such characteristic are mentioned below:-
       a.    Supply of land is fixed:- The most important peculiarity of land that its supply is fixed it is given by nature.
       b.    Production of land is cost less:- Another peculiarity of land is that it does not have any cost of production. It is already there, ready to be used. All other  agents of production have to be produced at a cost.

7. What is productivity of land?

           The capability of land in raising total output of a country, may be termed as its productivity. For example productivity of agricultural land means the average yield of any crop per hectare.

8. Distinguish between marginal and average productivity of land.

       By average productivity of land, we mean the output obtained from land divided by the area of land. By marginal productivity of land, we mean the increase in the output obtained from land when the area of land used increase by one unit, say by one acre.

9. How is land as a factor of production, different from labour?

      As a factor of production land is different from labour in the following ways.
   a.  The supply of land is fixed from the view point of whole society, but the supply of labour is variable.
   b.  Labour is mobile factor but land is immobile.

10.What is meant by labour in Economics?

         In economics, labour means the capacity to exert physical or mental effort for the purpose of producing a good or a service. It is only human labour that is considered in this context . The physical exertion of non human animals in not called labour.

11. ''Laws of Diminishing Returns is the stage of firms decision making''. Discuss

 Laws of Diminishing Returns sets in when optimum capacity has been achieved from the given fixed and variable resources.Now, the firm has to decide whether it wants to further invest in additional fixed factors like machine ,land etc.to derive better returns.At this stage, the decision pertaining to further expansion has to be taken.Hence,the stage of laws of Diminishing returns is the stage of decision making

12. Define Division of labour.

By division we mean the allocation of different parts of the production process to different workers or to different groups of workers. In modern economy,  workers participating in the production of all goods and services. Infact, in most cases, a person or a group is engaged in just one line of production. Specialization is the rule rather than the exception for instance, in a shoe making factory some workers are engaged in the tanning of animal skin, while some other workers are engaged in cutting of leather, stitching or sewing of leather pieces, colouring of leather, packaging of shoes etc.

13. Define human capital.

If the labour force of any country can be made more efficient through better education, training  and health facilities then that human resource would be considered as human capital.

14. What is the expansion of DALY?

The expansion DALY is disability Adjusted Life Years. This concept was introduced by the WHO to take in to account the effective supply of labour by the able – bodied and healthy persons in a country.

15.  Mention two factors which have increased the mobility of labour in recent times from rural to urban areas.

Two factors which are supposed to be responsible for increased mobility of labour from rural to urban areas in recent times are:

    (i)  Rural unemployment:- Slow growth of agricultural sector and growing incidence of rural unemployment induce the labourers to migrate from rural areas to urban areas in search of jobs.
   (ii)   Higher expected income: Relatively higher wages in Urban areas and higher expected income in future also at least rural labourers and hence, they take such migration decision.

16. State two ways by which a worker benefits from his increased efficiency.

 A worker benefits from his increased efficiency in the following two ways.
a.    He gets  the opportunity to raise his income and
b.    His standard of living can also be improved.

17. What will happen to the labour force in a country if there is a relative increase in the population between the ages of 50 to 80 years?

If there is an increase in the percentage of population within the age group of 50-80 years, then the supply of able – bodied adult in the labour force will fall. As a result the labour efficiency will be affected.

18. Define capital.

Capital essentially is produced means of production. There are two important points in this definition. First it is produced that is it is produced by man and is not a gift of nature. Secondly it is means of production that is it is used as an input in producing other goods it is not directly consumed .These different types of machines.raw materials, buses, trucks, rail engines ships etc are examples of capital.

19. Differentiate between capital and capital formation.

20. Savings is essential for capital formation. Explain.

Change in stock of capital during a particular time period is called capital formation. It requires  investment in productive activities. Again this investment depends on adequate savings mobilization of those savings and proper channelization of mobilized savings in productive investment. So savings is essential for capital formation.