Class 9 new ncert Chapter 8 SST Solution - Building Blocks in Economics: The Problem of Choice

Q & A —  6th   7th   8th   9th   10th

Important Question Answer

Question 1. What does economics deal with?

Answer: Economics deals with how people and societies make choices to use limited resources to satisfy their unlimited wants. It studies how consumers, producers, governments and other economic entities make decisions.

Question 2. What is the difference between needs and wants?

Answer:

• Needs are things essential for living, such as food, water and shelter.
• Wants are things people desire for comfort or enjoyment, such as gadgets, vacations and luxury items.

Question 3. What are resources? Give examples.

Answer: Resources are the factors used to produce goods and services. They can be natural or human-made.

Examples: Water and coal are natural resources, while capital and technology are human-made resources.

Question 4. Why are resources called scarce?

Answer: Resources are called scarce because they are limited in quantity, while human wants are unlimited. Therefore, all wants cannot be satisfied with the available resources.

Question 5. What is the opportunity cost?

Answer: Opportunity cost is the value of the best alternative that is given up when we choose one option over another.

Example: If a student spends ₹100 on a notebook instead of saving it for a tennis racket, the opportunity cost is the benefit of saving the money for the racket.

Question 6. How does the Production Possibility Curve (PPC) help in economic decision-making?

Answer: PPC helps to:

• Understand the trade-off between two goods.
• Understand opportunity cost.
• Use resources efficiently.
• Avoid wastage.
• Improve planning and decision-making.

Question 7. What is labour-intensive production?

Answer: Labour-intensive production uses more workers and less machinery.

Examples: Agriculture and handicrafts generally depend more on labour.

Question 8. What is capital-intensive production?

Answer: Capital-intensive production uses more machines and technology and fewer workers.

Examples: Steel and automobile manufacturing generally use more machinery.

Question 9. What factors affect the choice of production technique?

Answer: The main factors are:

• Cost of capital.
• Availability of technology.
• Nature of the product.
• Availability and cost of labour.
• Availability of other factors of production.
• Government laws and regulations.

Question 10. What is an economic system?

Answer: An economic system is the system through which a country organises the production, consumption and distribution of goods, services and resources.

Question 11. Name the three types of economic systems.

Answer: The three main types are:

1. Planned economy
2. Market economy
3. Mixed economy

Question 12. What is a planned economy? Write it's features and limitations.

Answer: A planned economy is an economic system in which the government makes major economic decisions. It decides what and how much to produce, how to produce and who will receive the goods and services.

Features:

1. The government controls many major resources and sectors.
2. Production and economic activities are largely guided by government plans and regulations.

Limitations:

• Less competition.
• Less motivation among enterprises.
• Less improvement in quality.
• Less innovation.

Question 13. What is a market economy? What are it's main features?

Answer: A market economy is an economic system in which the allocation of resources and prices are determined mainly by demand and supply, with limited direct government intervention.

Features :

• Private ownership is common.
• Demand and supply influence production and prices.
• There is competition among producers.
• Competition can encourage better quality.
• It can encourage lower prices and innovation.
• The government provides important public goods and infrastructure.

Question 14. What is a mixed economy, and why is it considered important?

Answer: A mixed economy is an economic system that combines the features of both a market economy (private sector) and a planned economy (public sector). In this system, both the government and private individuals or enterprises play key roles in making economic decisions.

Its Importance:

• Balance & Growth: It encourages private enterprise, healthy competition, and innovation to drive economic growth.
• Public Welfare: It allows the government to intervene to provide essential public goods (like education and healthcare), protect consumer rights, and regulate the market to reduce inequalities.

Question 15. What are public goods? Give examples.

Answer: Public goods are goods and services that are available to people without excluding anyone from their use.

Examples: Roads, parks, police services, street lights and basic education.

Question 16. How did India's economic system change after 1991?

Answer: After Independence, India followed a more state-led approach, with significant government control over industries and resources. In 1991, India introduced major economic reforms that reduced excessive regulations, encouraged private enterprises, opened the economy to global trade and investment, and increased competition. India therefore gradually became more market-oriented while retaining an important role for the government.

Question 17. Why is data important for economic decisions?

Answer: Data provides facts and information needed for making better decisions. It helps people, businesses and governments understand risks, opportunities, trends and possible outcomes instead of relying only on guesswork.

Question 18. What is the Economic Survey of India? How does it help the government?

Answer: The Economic Survey is an important annual report prepared by the Ministry of Finance. It reviews India's economic performance and discusses areas such as agriculture, industry, services, employment, inflation, education, health and infrastructure.

It provides important economic information that helps policymakers understand the economy and make better policies. It also provides useful insights before the Union Budget.

Question 19. Explain the relationship between scarcity, choice and opportunity cost.

Answer: Human wants are unlimited, but resources are limited. This creates scarcity. Because resources are scarce, people have to make choices about how to use them. When one option is selected, another option has to be given up. The value of the best alternative given up is called opportunity cost.

Flow: Unlimited Wants + Limited Resources → Scarcity → Choice → Opportunity Cost

Question 20. Explain the three key questions of economics with examples.

Answer: Every economy has to answer three basic questions:

1. What to produce? – Which goods and services should be produced and in what quantity?
2. How to produce? – Which resources, technology and production methods should be used?
3. For whom to produce? – Who will use or benefit from the goods and services?

These questions arise because resources are limited and can have different uses.

Question 21. Explain the importance of considering future consequences while making economic decisions.

Answer: Economic decisions made today can affect the future. For example, producing water-intensive crops may provide short-term profit but may put pressure on water resources. Choosing options that consider long-term effects can help protect resources, support sustainability and improve future well-being.

Question 22. Differentiate between planned, market and mixed economies.

Basis	Planned Economy	Market Economy	Mixed Economy
Main decision-maker	Government	Market forces	Government + private sector
Ownership	Mainly government	Mainly private	Both
Prices	Mainly determined by government	Mainly influenced by demand and supply	Market forces with government regulation
Competition	Limited	Greater	Present
Government role	Very high	Relatively limited but important	Important