Question Bank — Factors of Production

QUESTION BANK

Chapter 7: Factors of Production

(Exploring Society: India and Beyond | Grade 8)

Section A — MCQs (10 questions, 1 mark each)

1. Which of the following is not classified as a factor of production in the chapter?
   (a) Land (b) Labour (c) Technology (d) Entrepreneurship

2. Human capital refers to:
   (a) Physical strength only (b) Specialised skills, knowledge and expertise (c) Money invested in machinery (d) Natural resources like minerals

3. The Japanese concept of ‘kaizen’ mentioned in the chapter means:
   (a) Rapid industrialisation (b) Continuous improvement (c) Strict work discipline (d) Export-oriented production

4. Which of the following is an example of capital as per the chapter?
   (a) Sunlight (b) A carpenter’s skill (c) Machinery and tools (d) An entrepreneur’s idea

5. The chapter states that businesses obtain capital mainly from:
   (a) Only government grants (b) Personal savings, family, banks and stock market (c) Foreign aid alone (d) Natural resources

6. Assertion (A): Education and training are facilitators of human capital.
   Reason (R): They help individuals gain knowledge and skills required to perform labour efficiently.
   (a) Both A and R are true and R is the correct explanation of A.
   (b) Both A and R are true but R is not the correct explanation of A.
   (c) A is true but R is false. (d) A is false but R is true.

7. Assertion (A): Technology is described as an enabler of production.
   Reason (R): It allows enterprises to produce more goods with the same or fewer inputs.
   (a) Both A and R are true and R is the correct explanation of A.
   (b) Both A and R are true but R is not the correct explanation of A.
   (c) A is true but R is false. (d) A is false but R is true.

8. The demographic dividend refers to:
   (a) Increase in elderly population (b) Benefit from a large young working population (c) Decline in birth rate (d) Growth in natural resources

9. Which traditional Indian technique is mentioned in the chapter for making ships?
   (a) Use of iron nails (b) Stitching wooden planks with cords (c) Use of steel frames (d) Welding of metal sheets

10. Corporate Social Responsibility (CSR) law in India mandates companies to spend what percentage of their average profits on CSR activities?
    (a) 1% (b) 2% (c) 5% (d) 10%

Section B — Very Short Answer (6 questions, 2 marks each)

1. Define the term ‘factors of production’ as given in the chapter.
2. What is the difference between labour and human capital?
3. State any two facilitators of human capital mentioned in the chapter.
4. Identify two sources from which an entrepreneur can raise capital.
5. What is meant by ‘startup’ according to the chapter?
6. Name any two responsibilities of businesses towards their workers as stated in the chapter.

Section C — Short Answer (5 questions, 3 marks each)

1. Explain how land, as a factor of production, includes both geographical land and natural resources. Give two examples from the chapter.
2. Compare the role of education and healthcare in developing human capital.
3. Why is entrepreneurship considered important for the economy? Explain with reference to the functions of an entrepreneur listed in the chapter.
4. How does technology act as an enabler in production? Give two examples from daily life mentioned in the chapter.
5. What challenges does India face in developing human capital? Mention any three points from the chapter.

Section D — Long Answer (3 questions, 5 marks each)

1. Analyse the interconnection between the four factors of production (land, labour, capital and entrepreneurship). How does the absence of any one factor affect production?
2. “Human capital is not just the basic efforts of labour but also the quality and efficiency of that labour.” Explain this statement with reference to facilitators and challenges of human capital development in India.
3. Discuss the role of technology in production with examples from the chapter. How has it changed the way skills and jobs are accessed?

Section E — Source-Based (2 questions, 4 marks each)

Source 1

“Factors of Production
In economics, the inputs used in a production process or the factors of production are classified into four types — land, labour, capital and entrepreneurship. Technology is a facilitator and a crucial factor that enables enterprises to produce more goods with the same or fewer inputs.”

1. List the four factors of production mentioned in the source. (1)
2. What role does technology play according to the source? (1)
3. Why is technology described as a ‘facilitator’? (1)
4. Give one example from the chapter showing how technology helps produce more with fewer inputs. (1)

Source 2

“An entrepreneur is one who: Identifies a problem and is resolute to solve it with an innovative solution; Combines various factors of production; Takes risks by investing money and time; Makes key decisions regarding the operation and functioning of his/her business; Contributes to the welfare of society with his/her innovation.”

1. Who is an entrepreneur according to the source? (1)
2. Mention any two tasks performed by an entrepreneur. (1)
3. Why does an entrepreneur ‘take risks’? (1)
4. How does entrepreneurship benefit society as per the source? (1)