NCERT Solutions for Class 8 Social Science Chapter 7 Factors of Production

Page 163

The Big Questions

1. What are the factors of production?
See AnswerThe factors of production are the basic inputs or resources used to create goods and services. According to economics, there are four main types: land, labour, capital, and entrepreneurship. Technology also plays a very important role as a helper, allowing businesses to produce more with the same or even fewer inputs.
1. Land: In economics, “land” means more than just the physical ground. It includes all natural resources like soil, forests, water, air, sunlight, minerals, oil, and natural gas. Businesses either buy land or pay to use it for a certain time.
2. Labour: This refers to the physical and mental effort that people put into the production process. Everyone, from carpenters to doctors, contributes their work, knowledge, and skills to help create the goods and services society needs.
3. Capital: This includes money and all the human-made tools and equipment used in production. Examples are machinery, tools, vehicles, shops, factories, and office buildings. Capital is crucial for any business, whether it makes products or provides services.

2. How are these factors interconnected?
See AnswerThe factors of production – land, labour, capital, entrepreneurship, and technology – all work together to create goods and services. They are deeply connected and depend on each other. The amount of each factor needed changes depending on what is being produced. For example, making farm products or handmade items usually needs more labour, while making advanced items like computer chips needs more capital (machines and money). If any of these factors are missing or used wrongly, production can become difficult or even stop. However, new technologies can sometimes change how much of each factor is needed, for instance, by reducing the need for labour with more machines.

3. What is the role of human capital in production, and what are its facilitators?
See AnswerHuman capital refers to the specialized skills, knowledge, abilities, and expertise that people have. It’s what allows them to perform work and create economic value. It’s more than just physical effort; it’s about the quality and efficiency of that effort. People use their knowledge and skills to make goods and services, playing a key role in economic activities.

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THINK ABOUT IT

1. What could be the lessons for young entrepreneurs that you can gather from the above case?
See AnswerFrom J.R.D. Tata’s life, young entrepreneurs can learn several important lessons:
1. Social Responsibility: Businesses should not only focus on making money but also aim to help society and contribute to the nation’s development.
2. Visionary Thinking: It is important to have a big vision and to be a “man of vision” to start new ventures and expand into many different areas.
3. Hard Work and Honesty: These are crucial qualities for success.
4. Caring for Workers: Treating employees well and providing good working conditions is a valuable part of building a successful business.

2. Does the existing knowledge of the entrepreneur help in finding solutions to the problem at hand? Or do they need to seek other sources?
See AnswerThe specific section about “The man who dreamed big for India” focuses on J.R.D. Tata’s achievements and character traits, such as his vision and leadership. It does not directly discuss whether his existing knowledge helped in problem-solving or if he needed to seek other sources. The text does not provide enough information to answer this question based solely on this section.

3. Is profit the only motivation for an entrepreneur? Why or why not?
See AnswerNo, profit is not the only motivation for an entrepreneur. The story clearly states that J.R.D. Tata “believed that businesses should not only make money but also help society”. This shows that contributing to society and the nation’s building was a significant motivation for him, beyond just making profits. Additionally, entrepreneurs often get a deep sense of satisfaction from seeing their dreams come true and serving people.

4. What are the other personality traits required to be a successful entrepreneur?
See AnswerBased on the description of J.R.D. Tata, other important personality traits for a successful entrepreneur include:
Vision: Having a clear idea of what they want to achieve and where they want to take their business and the nation.
Hard Work: Being dedicated and putting in the necessary effort.
Honesty: Operating with integrity.
Caring for Workers: Showing concern for the well-being and working conditions of their employees.
Philanthropy: A willingness to contribute to society and help others.

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Questions and activities

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?
See AnswerIn economics, the inputs used to produce goods and services are called factors of production and they are classified into four main types: land, labour, capital, and entrepreneurship.
a. Land (Natural Resources): This term includes not just geographical land but also all natural resources like soil, forests, water, air, sunlight, minerals, oil, and natural gas. Businesses either buy or rent land for their operations.
b. Labour (Human Resources): This refers to the physical and mental effort involved in production. People contribute their work to create goods and services for society’s needs. Examples include carpenters, farmers, teachers, and doctors.
c. Capital: This includes monetary resources and durable assets such as machinery, tools, equipment, vehicles, computers, shops, factories, and office buildings. These are human-made resources and money used to produce other goods and services. Businesses often get capital from personal savings, family, friends, bank loans, or by raising money from the public through the stock market.
d. Entrepreneurship: This involves starting a new business or creating something innovative to solve a problem. An entrepreneur is a person who has an idea, takes risks, combines the other factors of production, and works hard to make their idea successful. They bring innovative products and services to the market, create job opportunities, and support livelihoods.

2. How does human capital differ from physical capital?
See AnswerPhysical Capital refers to the tangible assets and monetary resources that businesses use for their daily operations. This includes things like machinery, tools, equipment, buildings (like shops and factories), and the money itself.
The main difference is that human capital is intangible and resides within people (their skills, knowledge), while physical capital is tangible (machines, buildings, money) and can be bought, sold, or rented. Physical capital is used by human capital to produce goods and services.

3. How do you think technology is changing how people develop their skills and knowledge?
See AnswerTechnology is significantly changing how people develop their skills and knowledge by making learning more accessible and flexible.
a. Online Learning Platforms: Government platforms like SWAYAM (Study Webs of Active Learning for Young Aspiring Minds) offer free online courses (MOOCs) for students, covering various subjects like robotics and textile printing. This allows learners to study at their own pace, from anywhere, even while managing other jobs or courses.
b. Online Job Portals: Technology provides online portals, such as the Government’s National Career Service, that help people find job opportunities across many sectors, from plumbing to accounting.
c. Eliminating Barriers: These technological advancements have removed geographical barriers, giving people wider access to knowledge, skill development, and jobs both within India and internationally.

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?
See AnswerIf I could learn cooking today, here’s why it would be a valuable skill:
Cooking is a practical and creative skill that allows you to transform ingredients into delicious and nourishing meals. If I could acquire this skill:
a. Creativity and Experimentation: Cooking offers a wonderful outlet for creativity. You can experiment with different ingredients, spices, and techniques to create unique dishes.
b. Problem-Solving: Cooking often involves problem-solving, such as adjusting recipes, substituting ingredients, or managing multiple tasks simultaneously.
c. Understanding Processes: Learning to cook would involve understanding various processes, from food preparation and sanitation to the chemical reactions that occur during heating and cooling.

5. Do you think entrepreneurship is the ‘driving force’ of production? Why or why not?
See AnswerYes, entrepreneurship can be considered a driving force of production.
1. Innovation and Problem Solving: An entrepreneur identifies problems and is determined to solve them with new and creative solutions. Their vision helps bring innovative products and services to the market.
2. Combining Factors: Entrepreneurs are crucial because they combine the other factors of production—land, labour, and capital—and organize them to create goods and services. Without someone to take the initiative and organize these elements, production might not happen effectively.
3. Job Creation and Livelihoods: Entrepreneurs create job opportunities and support livelihoods, which benefits society and the nation.
4. Risk-Taking and Decision-Making: They take risks by investing their money and time, and make key decisions about how the business operates. This active role in managing and directing resources is essential for production to occur.

6. Can technology replace other factors like labour? Is this good or bad? Support your answer with the help of an example.
See AnswerYes, technology can sometimes replace other factors like labour, often by reducing the dependence on them.
1. Replacement Aspect: The text states that “increased machine use in agriculture can lower dependence on labour”. This implies that technology, in the form of machinery, can perform tasks previously done by human labour.
– Examples
a. In agriculture, machines can take over manual tasks, reducing the need for a large labour force.
b. In the textile industry, 3-D printing can help produce handloom products on a large scale, which might reduce the need for extensive manual labour in traditional methods.
2. Potential Benefits (Good): Technology can increase productivity, improve efficiency, and make goods and services more accessible and affordable. It can also create new types of jobs that require different skills, as seen with the need for software engineers or those who manage advanced machinery.
3. Potential Drawbacks (Bad): When technology replaces labour, it can lead to job displacement for workers whose skills are no longer needed, potentially causing unemployment or requiring them to re-skill. This can create societal challenges if not managed well.

7. How do education and skill training affect human capital? Can they substitute for each other, or do they complement each other?
See AnswerEducation and skill training significantly affect human capital by enhancing an individual’s knowledge, abilities, and productivity.
a. Education: It helps individuals gain knowledge, from basic literacy to specialized expertise in specific fields. Education prepares individuals to solve real-world problems and enriches their understanding.
b. Training: It is the process of learning the specific skills needed to perform a particular job or activity. Training often involves hands-on application and understanding of procedures, such as observing construction sites or testing materials for civil engineers.
Education and skill training: Complement each other rather than substitute for each other. Education provides the foundational knowledge, while training helps apply that knowledge practically and develop the specific skills required for a job. The book quotes, “With education and training, individuals are prepared to excel in their careers”, indicating that both are important together for developing human capital.

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?
See AnswerTo start a business producing steel water bottles, you would need the following inputs:
a. Land: You would need a physical space, like a factory building or a piece of land to construct one. This would also include access to resources like water and electricity.
b. Labour: You would need various types of human effort. This includes skilled workers for manufacturing processes (e.g., cutting, shaping, welding steel), quality control, packaging, and management staff.
c. Capital: This would involve significant monetary resources and physical assets.
– Monetary Capital: Money for rent (if leasing), purchasing raw materials (steel sheets, caps, seals), equipment, paying wages, and covering operational costs.
– Physical Capital: Machinery for steel processing (e.g., cutting machines, presses, welding robots), tools, vehicles for transport, office equipment, and the factory building itself.
– How to obtain: Monetary capital could come from personal savings, family and friends, or bank loans. Physical capital would be purchased using this monetary capital.
d. Entrepreneurship: This is you, the business owner. You would need the idea for steel water bottles, the willingness to take risks, the ability to combine all other factors, and the drive to manage and grow the business.
What happens if one of the factors is missing?
a. Missing Land: Without a physical location, you cannot set up your factory, store raw materials, or conduct manufacturing.
b. Missing Labour: Without workers, the machinery cannot be operated, raw materials cannot be processed, and finished products cannot be assembled or packaged.
c. Missing Capital: Without money, you cannot buy raw materials, acquire machinery, pay workers, or rent a space. Without physical assets like machinery, you cannot transform steel into water bottles.
d. Missing Entrepreneurship: Without an entrepreneur, there would be no one to envision the product, take the initiative, organize the other factors, and make crucial decisions to start and run the business. The whole venture wouldn’t begin or be managed effectively.
In essence, all factors are like “puzzle pieces” that work together to create goods and services. If a piece is missing, the puzzle cannot be completed, meaning your business operations would likely halt or fail.

9. Interview an entrepreneur or founder 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.
See AnswerMy Report: Interview with Ms. Priya Sharma – Priya’s Healthy Bites
1. About the Entrepreneur:
I interviewed Ms. Priya Sharma, who owns “Priya’s Healthy Bites.” Her business makes and sells delicious homemade, healthy snacks like baked chips, energy bars, and millet cookies.
2. Why They Started (Motivation):
Ms. Sharma told me she started her business because she noticed that many kids and even adults didn’t have easy access to healthy snack options. She loves cooking and wanted to create tasty snacks that were also good for you. The most exciting part for her was seeing her recipes come to life and knowing she was offering something genuinely good.
3. Opportunities They Saw:
She saw a big opportunity because more and more people are becoming aware of healthy eating. Also, selling online or through small local shops made it easier to reach customers without needing a big, expensive store. She felt there was a real “gap” in the market for her kind of products.
4. Challenges They Faced:
The biggest challenge for Ms. Sharma was getting enough money to start. Buying ingredients and packaging in bulk was expensive. Also, managing all the cooking, packaging, and delivering orders by herself was hard work, sometimes making her work very long hours. She once had trouble getting a specific ingredient, which delayed an order, which was unexpected. She overcame these by planning carefully and asking her family for help when needed.
5. Lessons & Advice:
The most important lesson she learned is to be patient and persistent. Things won’t always be easy, but if you believe in your idea and work hard, you can succeed. Her advice for young students is: “If you have an idea, start small, learn constantly, and never be afraid to try!”
6. My Thoughts:
I found it really interesting how Ms. Sharma turned a simple idea of healthy snacks into a real business by identifying a problem and working hard. It made me realize that even small ideas can become big if you have passion and determination!

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?
See AnswerRatna might consider raising prices to cover the increased cost of rent, as rent is a significant expense. However, raising prices too much could lead to fewer customers, especially if there are other restaurants nearby.

• Will you look for a cheaper location?
See AnswerThis is a strong possibility. If the doubled rent makes the business unprofitable or too risky, Ratna might seek a new, more affordable location that still attracts customers. This is part of how businesses manage their costs.

• How does this affect your business?
See AnswerDoubled rent would significantly increase Ratna’s operating costs, reducing her profits. It might force her to cut other expenses, reduce staff, or potentially even close the business if she cannot adapt or find a more viable solution.

II. Imagine one of your helpers quits suddenly.
• Can the remaining workers manage the same amount of work?
See AnswerCan the remaining workers manage the same amount of work? Initially, the remaining six helpers (from a team of seven ) might be able to manage, but it would likely increase their workload and could lead to burnout or a decrease in quality of service or speed.

• Will you need to offer a higher salary to attract a new worker?
See AnswerYes, to quickly replace a worker, especially a skilled one, Ratna might need to offer a more competitive salary or better benefits to attract a new helper in a timely manner. This is because labour is an essential input.

III. You receive a small loan to invest in better technology for your restaurant.
• Will this increase the production or improve quality?
See AnswerInvesting in better technology, such as advanced kitchen equipment or ordering systems, can definitely increase efficiency and potentially production capacity. For example, a new, faster oven could bake more items in less time. Improved technology could also lead to more consistent quality of food.

• Will it help you reach more customers?
See AnswerYes, indirectly. Increased production capacity and improved quality can lead to higher customer satisfaction, positive reviews and a better reputation, which in turn can attract more customers. Efficient technology might also enable faster service, improving customer experience.

IV. Suppose another restaurant opens in the
neighbourhood.
• How will you attract and keep your customers?
See AnswerWith new competition, Ratna would need to focus on strategies to differentiate her restaurant. She already has a reputation for “tasty, high-quality food”.

• Will you improve your service, reduce prices or offer something new?
See AnswerAs an economist I would suggest a mix of these:
Improve service: Focus even more on excellent customer service, friendly staff, and a pleasant dining experience.
Reduce prices: This is a common competitive strategy, but Ratna would need to ensure it doesn’t significantly impact her profit margins.
Offer something new: Introduce new menu items, special promotions, loyalty programs, or unique dining experiences to stand out from the new competitor. Innovation is a key aspect of entrepreneurship.

V. What government laws or rules should be changed to improve the ease of doing business?
See Answera) Simplifying regulations: Reducing complex paperwork or licensing processes for new businesses.
b) Easier access to loans/capital: Government initiatives to provide affordable loans or financial support for small and medium-sized enterprises.
c) Infrastructure development: Improving roads, public transport, and utilities (like electricity and water supply) to reduce operational costs and logistical challenges for businesses.
d) Skill development programs: Government support for training programs that ensure a steady supply of skilled labour for various industries.

Very Short Answer Type Questions with Answers of Class 8 Social Science Chapter 7 Factors of Production.

1. What are the four factors of production?
See AnswerLand labour capital entrepreneurship.

2. What does land include in economics?
See AnswerAll natural resources like soil water minerals.

3. What is human capital?
See AnswerSkills knowledge and abilities of workers.

4. How does technology help production?
See AnswerIncreases efficiency reduces labour needs.

5. What is physical capital?
See AnswerMachinery tools buildings used in production.

6. Who combines factors of production?
See AnswerEntrepreneurs organize them for business.

7. Can technology replace labour?
See AnswerYes through automation in some sectors.

8. What motivates entrepreneurs beyond profit?
See AnswerSocial responsibility innovation satisfaction.

9. How does education help human capital?
See AnswerProvides knowledge problem-solving skills.

10. What happens without entrepreneurship?
See AnswerOther factors remain unorganized unused.

11. Why is capital important?
See AnswerEnables purchase of tools equipment.

12. What happens if land is missing?
See AnswerNo space for production operations.

13. How does training help workers?
See AnswerDevelops job-specific practical skills.

14. What is labour in economics?
See AnswerHuman physical and mental effort.

15. What role does government play?
See AnswerCreates business-friendly policies infrastructure.

Short or Medium length Answer Type Questions with Answers of Class 8 Social Science Chapter 7 Factors of Production.

1. What are the four factors of production in economics?
See AnswerThe four factors are land (natural resources) labour (human effort) capital (tools/money) and entrepreneurship (business organization). Technology enhances these factors’ productivity in modern economies.

2. How does human capital differ from physical capital?
See AnswerHuman capital refers to workers’ skills/knowledge while physical capital includes machinery/tools. Human capital is intangible and personal while physical capital is tangible and can be bought/sold.

3. What role does technology play in production?
See AnswerTechnology acts as a productivity multiplier enabling more output with same inputs. It can automate tasks improve efficiency and sometimes replace certain labour-intensive processes in production systems.

4. Why is entrepreneurship considered crucial for production?
See AnswerSee AnswerEntrepreneurs combine other factors take risks and innovate. They identify opportunities organize resources and drive economic activity by creating businesses and employment opportunities in the market.

5. How can education improve human capital?
See AnswerEducation develops knowledge problem-solving abilities and adaptability. It prepares workers for complex tasks enables skill upgrades and increases productivity potential in various economic sectors.

6. What happens when one factor of production is missing?
See AnswerProduction becomes impossible or inefficient as all factors are interdependent. For example without capital workers lack tools and without labour machines remain unused affecting overall output.

7. How does technology affect labour needs?
See AnswerTechnology can reduce some labour needs through automation but creates demand for new skills. It changes rather than eliminates the need for human workers in most cases.

8. What are key traits of successful entrepreneurs?
See AnswerSuccessful entrepreneurs show vision risk-taking innovation hard work and social responsibility. They combine resources creatively solve problems and persist through challenges to build businesses.

9. Why is land important in production?
See AnswerLand provides space natural resources and raw materials. It serves as the physical foundation for all production activities from agriculture to manufacturing and service industries.

10. How does capital contribute to production?
See AnswerCapital provides necessary tools equipment and financial resources. It enables acquisition of other factors enhances worker productivity and facilitates business operations and expansion.

Descriptive and long Answer Type Questions with Answers of Class 8 Social Science Chapter 7 Factors of Production.

1. Explain the four factors of production with examples.
See Answer– Land: Includes all natural resources like soil water minerals forests.
– Labour: Human effort both physical and mental like carpenters doctors teachers.
– Capital: Man-made tools and money like machinery buildings vehicles computer.
– Entrepreneurship: Organizing other factors to create businesses and innovations.
– Technology acts as helper enhancing productivity of other factors.

2. Describe how technology impacts factors of production?
See Answer– It can reduce labour needs through automation like agricultural machinery.
– Enhances capital efficiency with advanced tools and equipment.
– Improves land productivity through better resource management.
– Aids entrepreneurship with innovative solutions and processes.
– Creates need for new skills while making some obsolete.

3. What are the key characteristics of successful entrepreneurs?
See Answer– Visionary thinking to identify opportunities and solutions.
– Risk-taking ability to invest in new ventures.
– Hard work and dedication to overcome challenges.
– Social responsibility towards workers and community.
– Innovation to develop new products and services.
– Honesty and integrity in business dealings.

4. Analyze how education and training develop human capital?
See Answer– Education provides theoretical knowledge and problem-solving skills.
– Training offers practical job-specific skills and applications.
– Together they enhance productivity and employability.
– Enable adaptation to technological changes in workplace.
– Create foundation for continuous learning and skill upgrades.
– Improve quality of labour force in economy.

5. Explain challenges when starting steel bottle business
See Answer– Land: Finding suitable affordable factory location.
– Labour: Hiring skilled workers for manufacturing.
– Capital: Arranging funds for machinery and operations.
– Raw materials: Sourcing quality steel consistently.
– Market: Creating demand and distribution channels.
– Competition: Differentiating from existing products.