Class 8 new ncert Chapter 7 SST Solution - Factors of Production

Q & A —  6th   7th   8th   9th   10th

Questions and Activities (NCERT Based Questions)

Question 1. How are the factors of production different from each other? What are the difficulties you faced in classifying the factors of production in the exercise given in-text?

Answer: The factors of production differ from one another on the basis of their nature and function.

• Land: It includes natural resources.
• Labour: It includes the physical and mental work performed by human beings.
• Physical Capital: It includes machines, tools, buildings and other man-made resources.
• Human Capital: It includes the knowledge, skills and abilities of people.
• Entrepreneurship: It includes the ability to start a business, take risks and combine different factors of production.

Difficulty in classification may arise because more than one factor can be used in the same activity. For example, the work of a trained person may be related to both labour and human capital.

Question 2. How does human capital differ from physical capital?

Answer: Human capital refers to the knowledge, skills, education, training and abilities of people, whereas physical capital refers to machines, tools, buildings, equipment and other physical resources used in production.

Example: The knowledge and skills of a trained engineer are human capital, while the computer and machine used by the engineer are physical capital.

Question 3. How do you think technology is changing the way people develop their skills and knowledge?

Answer: Technology has made it much easier to acquire skills and knowledge. Today, people can learn new things with the help of the internet, online courses, videos, digital books and other technological tools.

This enables people to continuously improve their skills and prepare themselves for new types of work. Therefore, technology is playing an important role in the development of human capital.

Question 4. A skill is something you learn and practice to get better. It helps you do things well, like playing a sport, creative writing, solving math problems, cooking, or even communicating well with people. If you could learn one skill today, what would it be and why?

Answer: If I get an opportunity to learn one skill today, I would like to learn computer programming.

This skill would help me use computers and technology more effectively. It would improve my problem-solving ability and could provide new opportunities in education and employment in the future.

Question 5. Do you think entrepreneurship is the 'driving force' of production? Why or why not?

Answer: Yes, I agree that entrepreneurship is the ‘driving force’ of production.

An entrepreneur starts new businesses, takes risks and brings together different factors of production such as land, labour and capital. An entrepreneur uses new ideas and technologies to produce new goods and services. Therefore, entrepreneurship plays an important role in moving production forward.

Question 6. Can technology replace other factors like labour? Is this good or bad? Support your answer with the help of an example.

Answer: Yes, in some situations technology can reduce the need for labour or replace certain types of labour.

For example, the use of modern machines in agriculture can complete work in less time that earlier required many workers.

This is not always good or bad. It can make production faster and more efficient, but some traditional types of employment may decrease. Therefore, workers need to learn new skills according to changing technology.

Question 7. How do education and skill training affect human capital? Can they be substitute for each other, or do they complement each other?

Answer: Education provides knowledge and understanding to a person, while skill training provides practical ability to perform a particular task.

Both are complementary to each other. Education and training together improve a person's knowledge, skills and productivity. Therefore, they generally do not substitute for each other.

Question 8. Imagine you want to start a business that produces steel water bottles. What kind of inputs are needed? How would you obtain them? Suppose one of the factors is missing; what happens to your business operations?

Answer: To start a steel water bottle business, I would need the following inputs—

• Land — to set up the factory.
• Labour — for making bottles and performing other tasks.
• Raw materials — such as steel, caps, etc.
• Physical capital — machines, tools and buildings.
• Human capital — trained and skilled workers.
• Capital/Money — to start and operate the business.
• Entrepreneurship — for planning the business, making decisions and taking risks.
• Technology — to make production better and more efficient.

These resources can be obtained through personal savings, bank loans, purchasing materials from the market and employing workers.

If any essential factor is unavailable, production will be affected. For example, if steel is unavailable, the production of bottles may stop. If skilled workers are unavailable, the quality of production may be affected.

Question 9. Interview an entrepreneur or founder of business to understand their motivation to start a business and the opportunities and challenges they saw. You can work in pairs to create a questionnaire to collect the information and share what you have learned in a report.

Answer: This is an activity-based question. The answer can be prepared by conducting an actual interview with a local entrepreneur. For example—

Information obtained from the interview:

• Inspiration to start the business: To fulfil the needs of people in the area and create self-employment.
• Opportunities received: Customer demand in the market, family support and availability of bank loans.
• Main challenges: Arranging money to start the business, attracting customers, facing competition and making the business profitable.
• Learning: The entrepreneur explained that hard work, patience, proper planning and understanding customer needs are necessary for business success.

Conclusion: The interview shows that entrepreneurship requires not only new ideas but also the ability to take risks, make correct decisions and face difficult situations.

Question 10. Think like an economist. Let's explore what happens when things change. If you were Ratna, what would you do in the following situations? Discuss with your classmates.

(I) Suppose the rent for your space suddenly doubles.

Will you raise the price of the food served to cover the costs?

Answer: Yes, if the rent has increased considerably and it is not possible to recover the cost in other ways, I would increase the price of the food slightly. However, I would not increase the price so much that the number of customers decreases.

Will you look for a cheaper location?

Answer: Yes, I would look for a place where the rent is lower and where enough customers can also be found.

How does this affect your business?

Answer: An increase in rent would increase the cost of the business and may reduce profits. If prices are increased, some customers may decrease. Therefore, I would also have to find other ways to reduce expenses and run the business efficiently.

(II) Imagine one of your helpers quits suddenly.

Can the remaining workers manage the same amount of work?

Answer: If the amount of work is low, the remaining employees may handle some additional work for a short period. However, if the workload is high, they may face an additional burden and the quality or speed of work may be affected.

Will you need to offer a higher salary to attract a new worker?

Answer: If suitable employees are not available, I would consider offering a reasonably higher salary or other benefits. This could help attract a qualified employee.

(III) You receive a small loan to invest in better technology for your restaurant.

Will this increase the production or improve quality?

Answer: Yes, better technology and equipment can help prepare food more quickly and efficiently. This may increase production and improve the quality of food.

Will it help you reach more customers?

Answer: Yes. Better quality and faster service can increase customer satisfaction. This may attract new customers and help retain existing customers.

(IV) Suppose another restaurant opens in the neighbourhood.

How will you attract and keep your customers?

Answer: I would maintain good food quality and cleanliness. I would provide good and timely service and pay attention to customers' preferences and suggestions. Reasonable discounts or other attractive offers could also be provided on special occasions.

Will you improve your service, reduce prices, or offer something new?

Answer: First, I would improve my service and quality. I would also introduce some new dishes according to customer needs. If necessary, I would try to keep the prices at a reasonable level.

(V) What government laws or rules should be amended to improve the ease of doing business?

Answer: To simplify the process of starting and running a business—

• Unnecessary paperwork should be reduced.
• Required permissions should be provided easily and quickly.
• Rules for small businesses should be made simpler.
• Online application and approval facilities should be increased.
• Small entrepreneurs should be able to access loans and training more easily.
• Necessary rules should be made clear and transparent.

This would help new entrepreneurs start businesses and operate them smoothly.

“Think about it”, “Let Us Explore” and “Don't Miss Out”

Question 1. What types of goods and services are available in different kinds of businesses in our local area?

Answer: Different businesses in the local area provide different goods and services. For example—

• Grocery shop — grains, milk, bread and packaged goods.
• Restaurant — cooked food, snacks and beverages.
• Vegetable vendor — fresh vegetables and fruits.
• Mobile repair shop — mobile phone repair services.
• Salon/Parlour — hair cutting and beauty services.

Question 2. What things are required to start a business?

Answer: To start a business, money, a suitable place, equipment, raw materials, workers, knowledge and skills are required. Along with these, proper planning and the desire to start a business are also necessary.

Question 3. Where can money be obtained to start a business?

Answer: A person can obtain money from personal savings, family and friends. If necessary, a bank loan can also be taken. Large businesses can also raise money through the stock market.

Question 4. Where does a person acquire the skills required for their work?

Answer: A person acquires the required skills through education, training, practice and experience. For example, a hairdresser can receive training and learn the skills of cutting and styling hair.

Question 5. What resources can be used as land in local businesses?

Answer: The space or land required for a shop, restaurant, salon, factory, etc. comes under land. In addition, soil, water, forests, minerals, etc. are also included under land because they are natural resources.

Question 6. How do hospitals, primary health centres, doctors and dispensaries help in the development of human capital?

Answer: These health services help people remain healthy. A healthy person can learn and work better. Therefore, health services help make human capital more capable and productive.

Question 7. Why are education and training necessary for human capital?

Answer: Education provides knowledge to a person, while training teaches the skills required for a particular task. Together, they increase a person's efficiency and productivity.

Question 8. What does ‘Kaizen’ mean?

Answer: Kaizen is a Japanese concept that means “continuous improvement”. It involves continuously trying to improve one's work and methods of working.

Question 9. How did the Japanese concept of ‘Kaizen’ help Japan's progress?

Answer: The habit of continuously improving and doing work in a better way helped Japan achieve a better quality of life for its people.

Question 10. What features of Germany's work culture have contributed to its industrial success?

Answer: In Germany, punctuality, attention to detail and high quality are given great importance. These features have helped Germany progress in the fields of technology and manufacturing.

Question 11. If a student has to leave school for two years due to financial reasons, what effect may this have on their education?

Answer: Staying away from school for two years may create a gap in the student's studies. Their knowledge and skills may be affected, and they may also face difficulties in further education and employment opportunities.

Question 12. What problems may arise if a business cannot find workers with the required skills?

Answer: The business will face a shortage of skilled workers. This may reduce the speed of work, affect the quality of production and increase the cost of production.

Question 13. Are some occupations more important than others?

Answer: No. Different occupations are necessary for the smooth functioning of society. If farmers do not grow crops, sanitation workers do not clean, or doctors do not provide treatment, it will seriously affect people's daily lives and society. Therefore, different occupations are important for one another.

Question 14. How was work viewed in ancient India?

Answer: In ancient India, work was considered a means of expressing one's ability and achieving perfection. Work was performed with dedication and complete involvement.

Question 15. How were skills and knowledge passed from one generation to another in ancient India?

Answer: Skills and knowledge were taught and learned from one generation to another. During this process, new knowledge also continued to develop along with the old knowledge.

Question 16. What is Shilpashastra?

Answer: Shilpashastra is a group of ancient texts containing detailed instructions related to sculpture, painting, architecture, woodwork, jewellery-making and other crafts.

Question 17. What was one major reason for the success of ancient Indian craftsmen?

Answer: Craftsmen practised regularly, performed their work with dedication and continued to learn new techniques. This helped them achieve excellence in their skills.

Question 18. What was the special technique of shipbuilding in ancient India?

Answer: About 2,000 years ago, Indians used a special stitching technique to build ships and boats. Wooden planks were stitched together with cords instead of being joined with nails.

Question 19. What were the advantages of the stitched-ship technique?

Answer: This technique made ships more flexible. It helped them sail easily in the Indian Ocean. These ships were used for maritime trade and cultural exchange.

Question 20. Why did the technique of making stitched ships decline?

Answer: After the arrival of Europeans in the Indian Ocean region in the 16th century, this technique gradually declined. At present, it is mainly used for making small fishing boats.

Question 21. What types of capital are required to operate a factory?

Answer: A factory requires land, buildings, machines, equipment, raw materials, vehicles and workers, etc. Financial capital is also necessary to obtain these resources.

Question 22. What can young entrepreneurs learn from the life of J. R. D. Tata?

Answer: Young entrepreneurs can learn honesty, hard work, new ideas, care for employees and a spirit of service to society from him. The purpose of business should not only be to earn profit but also to perform useful work for society.

Question 23. Should profit-making be the only motivation of an entrepreneur?

Answer: No. Earning profit may be necessary for a business, but an entrepreneur should also aim to solve social problems, provide useful goods and services and create employment opportunities.

Question 24. What qualities are required to become a successful entrepreneur?

Answer: A successful entrepreneur should have the ability to think of new ideas, work hard, take risks, make decisions, solve problems and understand the needs of society.

Question 25. How has technology affected the lives of people around us?

Answer: Technology has made many tasks easier and faster, such as online payments, online education, finding routes using GPS and using modern machines. It has also made access to knowledge, skills and employment opportunities easier for people.

Question 26. Can technology replace other factors of production, such as labour?

Answer: Yes, in some tasks, machines and technology can reduce the need for labour. For example, the increasing use of machines in agriculture can reduce dependence on human labour. However, human knowledge and skills are still required to operate, control and develop technology.

Question 27. What are the major stages involved in the production of a mobile phone?

Answer: The main stages in the production of a mobile phone are—

1. Research and development
2. Purchasing land and setting up a factory
3. Purchasing raw materials
4. Assembling different components and installing software
5. Testing functionality and quality
6. Large-scale production and packaging
7. Distribution to retail stores

Question 28. What is the role of human capital in the production of mobile phones?

Answer: Human knowledge, skills and effort are required at every stage of mobile phone production. Engineers, software specialists and project managers work together to develop and improve the product.

Question 29. How can production harm the environment?

Answer: Waste and polluted water generated during production can damage land and water sources. For example, waste from the leather industry can pollute rivers and soil.

Question 30. What problems may arise if old smartphones are not properly recycled?

Answer: Old smartphones may contain harmful elements such as lead and mercury. If they are not properly recycled, these elements can enter the soil and water and harm humans, animals and plants.

Question 31. How should producers use natural resources?

Answer: Producers should use natural resources responsibly and carefully. They should reduce waste, prevent pollution, promote recycling and protect the environment so that resources remain available for future generations as well.

Question 32. What is the importance of education, health and training in the development of human capital?

Answer: Education provides knowledge, training develops skills and good health enables a person to learn and work better. Therefore, all three are important for improving the quality and productivity of human capital.

Question 33. What are the major features of the skill tradition of ancient India?

Answer: In ancient India, skills and knowledge were passed from one generation to another. Craftsmen practised regularly, performed their work with dedication and learned new techniques. This helped develop a high level of skill in art, crafts and construction.

Question 34. What should businesses keep in mind regarding the environment and workers while producing goods?

Answer: Businesses should use natural resources carefully, reduce pollution and waste, and promote recycling. They should also provide workers with fair wages, a safe workplace, proper training and facilities related to their rights.

Other Important Questions

Question 1. What are the factors of production?

Answer: The resources or inputs used in the production of goods and services are called factors of production. In economics, there are four main types:

1. Land
2. Labour
3. Capital
4. Entrepreneurship

Technology is also an important supporting factor in production.

Question 2. What are the four main factors of production?

Answer: The four main factors of production are—

• Land — natural resources
• Labour — physical and mental contribution of human beings
• Capital — money and human-made resources
• Entrepreneurship — the ability to start a business, take risks and combine other factors.

Question 3. What is meant by ‘land’ in economics?

Answer: In economics, land does not mean only a piece of ground. It includes all natural resources such as soil, forests, water, air, sunlight, minerals, oil and natural gas.

Question 4. What is labour?

Answer: The physical and mental contribution made by human beings in production is called labour. Carpenters, farmers, construction workers, teachers and doctors contribute to production by using their knowledge, strength and skills.

Question 5. What is human capital?

Answer: Human capital refers to the knowledge, skills, abilities and expertise of people that are used in production. It represents not only the quantity of labour but also the quality and efficiency of labour.

Question 6. What is the difference between labour and human capital?

Answer:

Labour	Human Capital
It is the physical and mental contribution of people in production.	It refers to the knowledge, skills, abilities and expertise of people.
It focuses on the process of doing work.	It focuses on the ability to perform work more efficiently.
Example — the work performed by a construction worker.	Example — the specialised knowledge of a trained engineer.

Therefore, human capital increases the quality and efficiency of labour.

Question 7. What is the role of education in the development of human capital?

Answer: Education provides knowledge to a person and increases their understanding and ability to work. From school education to specialised education, it helps a person solve real-life problems. It increases productivity and employment opportunities.

Question 8. How does training develop human capital?

Answer: Training is the process of learning the skills required to perform a particular task. It enables a person to perform work more efficiently and effectively. For example, practical training at a construction site helps an engineer apply their knowledge to real work.

Question 9. What effect does good health have on human capital?

Answer: Good health helps a person work better both physically and mentally. Healthy workers can do more work in less time, can be more creative and are less likely to be absent due to health problems. For children, good health also helps them attend school regularly and learn effectively.

Question 10. How does the social and cultural environment affect human capital?

Answer: Work cultures that value hard work, continuous improvement, punctuality, quality and dedication increase the quality of human capital. The chapter gives the examples of Japan’s ‘Kaizen’ (continuous improvement) and Germany’s strong work ethic.

Question 11. What challenges does India face in the development of human capital?

Answer: India has made considerable progress in human capital, but ensuring adequate access to quality education, healthcare, training and skill development for everyone is still a challenge. Lack of education can affect a person's skills and productivity.

Question 12. What is demographic dividend?

Answer: When a country has a large number of young and working people and a relatively smaller number of dependent people, the economic benefit gained by the country is called demographic dividend. To take advantage of it, quality education, healthcare, training and skills are necessary.

Question 13. What is capital?

Answer: Money and human-made physical assets used in production are called capital. These may include machines, tools, equipment, vehicles, computers, shops, factories and workplaces.

Question 14. Where can a business obtain capital from?

Answer: The major sources of capital for a business are—

• Personal savings
• Family and friends
• Bank loans
• Funds raised by large companies through the stock market.

Question 15. What is interest?

Answer: The amount paid by a borrower to a lender, in addition to the principal amount, for using a loan for a certain period is called interest.

Question 16. What is entrepreneurship?

Answer: Starting one's own business or creating something new to solve a problem is called entrepreneurship. An entrepreneur takes risks and combines different factors of production to run a business.

Question 17. What are the major functions of an entrepreneur?

Answer: An entrepreneur—

1. Identifies a problem and provides a new solution.
2. Combines different factors of production.
3. Invests time and money and takes risks.
4. Makes important business-related decisions.
5. Contributes to the welfare of society through innovation.
6. Creates employment opportunities.

Question 18. What is technology?

Answer: The practical application of scientific knowledge is called technology. Technology is used in some form in almost every area of production.

Question 19. How does technology help production?

Answer: Technology helps make production simpler, faster and more efficient. Modern technology can produce more output using fewer or the same amount of resources. For example, drones in agriculture and GPS in transportation are useful technologies.

Question 20. Does old technology always disappear?

Answer: No. Some old technologies are still useful today. For example, technologies such as pulleys and handcarts are still used in some areas. Therefore, the arrival of new technology does not always mean that old technology completely disappears.

Question 21. How does technology increase educational and employment opportunities?

Answer: Through technology, students can learn new skills through online courses. Online platforms such as SWAYAM provide learning opportunities, while portals such as the National Career Service help people find employment opportunities. Thus, technology reduces geographical barriers and increases access to knowledge, skills and employment.

Question 22. How are the factors of production related to one another?

Answer: Land, labour, capital, entrepreneurship and technology are complementary and interrelated. Their proper combination is necessary for producing goods and services. A shortage or improper use of any important factor can affect the quality of production or even stop production.

Question 23. What are labour-intensive and capital-intensive sectors?

Answer:

Labour-intensive sectors: Sectors in which a large amount of labour is used for production are called labour-intensive sectors. Examples include agriculture, handicrafts and some manufacturing activities.

Capital-intensive sectors: Sectors that require more capital, specialised equipment and technical knowledge are called capital-intensive sectors. Examples include semiconductor chip manufacturing and satellite production.

Question 24. What is a supply chain?

Answer: A supply chain is an interconnected network of people, organisations, resources, activities and technology involved in the production and sale of goods.

Question 25. What effect does disruption in the supply chain have on production?

Answer: If the resources required for production are not available on time, the production process may stop or slow down. During the COVID-19 pandemic, such problems were seen because of dependence on resources located far away.

Question 26. What are the responsibilities of businesses towards their workers?

Answer: Businesses should provide workers with—

• Fair wages.
• Safe and proper working conditions.
• Opportunities for skill development and training.
• Respect for workers' rights.
• Healthcare and other necessary facilities.

Question 27. What is Corporate Social Responsibility (CSR)?

Answer: Corporate Social Responsibility (CSR) refers to responsible activities undertaken by businesses for the welfare of society and the environment. It includes reducing pollution, caring for the welfare of local communities and treating employees and customers with respect.

Question 28. What is an important fact related to CSR in India?

Answer: According to the chapter, India became the first country in the world to make a law on Corporate Social Responsibility in 2014. Under this provision, companies were required to spend 2 percent of their average profit of the previous three years on CSR activities.