Question Bank — Building Blocks in Economics: The Problem of Choice

NCERT Class 9 Social Science · Chapter 8 · CBSE Board Pattern

Class 9 Social Science Chapter 8 Question Bank CBSE Board Pattern

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

  1. Which of the following best describes the central problem addressed by economics?
    (a) Unlimited resources and limited wants
    (b) Limited resources and unlimited wants
    (c) Equal distribution of resources
    (d) Absence of choices in production

  2. The value of the next best alternative forgone when a choice is made is called:
    (a) Market price
    (b) Opportunity cost
    (c) Production cost
    (d) Marginal utility

  3. The Production Possibility Curve shows:
    (a) Unlimited production possibilities
    (b) Trade-offs between two goods using limited resources
    (c) Only labour-intensive techniques
    (d) Government-controlled prices

  4. Assertion (A): Human wants are unlimited and keep changing over time.
    Reason (R): Resources are limited and have alternative uses.
    (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.

  5. In which economic system does a central planning authority make all major decisions regarding production and distribution?
    (a) Market economy
    (b) Planned economy
    (c) Mixed economy
    (d) Traditional economy

  6. Assertion (A): In a market economy, the forces of demand and supply primarily determine what and how much to produce.
    Reason (R): The government owns most resources and controls prices through permits and licences.
    (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. Which of the following is an example of a labour-intensive method of production?
    (a) Automobile manufacturing using robots
    (b) Handicrafts and agriculture relying on more workers
    (c) Steel plants using heavy machinery
    (d) Automated garment factories

  8. The three key questions that economics seeks to address are:
    (a) What to produce, How to produce, For whom to produce
    (b) Where to produce, When to produce, Why to produce
    (c) How much to save, How much to invest, How much to export
    (d) What to import, How to tax, Where to spend

  9. Which document reviews India’s economic performance and provides insights for the Union Budget?
    (a) Five Year Plan
    (b) Economic Survey
    (c) Company Balance Sheet
    (d) Census Report

  10. In a mixed economy:
    (a) Only the government makes all decisions
    (b) Private individuals and the government both play important roles
    (c) There is no role for the market
    (d) Resources are allocated solely by tradition

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

  1. Define opportunity cost with an example from the chapter.
  2. State any two differences between needs and wants.
  3. Identify the three key questions that arise due to scarcity.
  4. What is a Production Possibility Curve? State one feature.
  5. Distinguish between labour-intensive and capital-intensive methods of production.
  6. State one feature each of a planned economy and a market economy.

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

  1. Explain why resources are considered scarce even though some resources like air appear abundant. Give reasons.
  2. Compare the role of the government in a planned economy and a market economy.
  3. Give reasons why producers must decide “for whom to produce”. How does this decision affect the type of goods produced?
  4. Explain how the Economic Survey helps in economic decision-making.
  5. Compare any three features of a mixed economy with those of a planned economy.

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

  1. Analyse the causes of the problem of choice in economics and discuss its consequences for individuals, enterprises and governments.
  2. Examine the significance of opportunity cost and the Production Possibility Curve in helping enterprises and governments make better decisions.
  3. “Different economic systems answer the three key questions differently.” Justify this statement by analysing how planned, market and mixed economies address the questions of what, how and for whom to produce.

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

Source 1

“Resources are required to satisfy human needs and wants… both natural and human-made resources are limited in quantity. They can be put to many alternative uses… When one alternative is chosen, the other options are given up. The value of what is given up is known as the opportunity cost.”

  1. What does the source identify as the reason for making economic choices?
  2. According to the source, what happens when one alternative is chosen?
  3. Define opportunity cost on the basis of the given passage.
  4. How does the concept mentioned in the source help in decision-making by enterprises?

Source 2

“In a planned economy, a central planning authority of the government… makes all major economic decisions in the market… The government has ownership in most resources and sectors… With limited private ownership, enterprises usually follow the central authority’s targets rather than market demand.”

  1. Who makes economic decisions in the system described in the source?
  2. State one feature of resource ownership mentioned in the source.
  3. How do enterprises function in this system according to the passage?
  4. Why might this system restrict competition? Support your answer from the source.
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Section A

  1. (b)
  2. (b)
  3. (b)
  4. (a) — Both true; scarcity forces choice (R explains A)
  5. (b)
  6. (c) — A true, R false (market economy has little government intervention)
  7. (b)
  8. (a)
  9. (b)
  10. (b)

Section B (2 marks each — any two relevant points, 1 mark each)
1. Opportunity cost is the value of the next best alternative forgone; e.g., farmer choosing barley over wheat.
2. Needs are essentials (food, shelter); wants are non-essentials and keep changing.
3. What to produce, how to produce, for whom to produce.
4. PPC shows different combinations of two goods using all resources; it is downward sloping.
5. Labour-intensive: more workers, less machinery; Capital-intensive: more machines, less workers.
6. Planned: government/central authority decides; Market: demand and supply decide.

Section C (3 marks each — any three points, 1 mark each)
1. Resources have alternative uses; even abundant resources have competing uses; human wants are unlimited.
2. Planned: government controls production and prices; Market: government acts as referee, ensures law and order.
3. Limited resources require targeting specific groups; different income levels and needs lead to different products (school shoes vs sports shoes).
4. Provides data on sectors, inflation, employment; acts as blueprint for budget; helps policymakers.
5. Mixed: private + government role; Planned: central authority dominates; Mixed allows competition with regulation.

Section D (5 marks each — any five points, 1 mark each)
1. Scarcity + unlimited wants → choice; affects allocation by households, firms, governments; leads to trade-offs and opportunity cost.
2. Helps measure sacrifice; PPC shows efficient combinations and trade-offs; aids planning and avoids wastage.
3. Planned: central authority decides; Market: demand-supply decides; Mixed: both coexist; examples from chapter (India post-1991, former USSR, USA).

Section E

Source 1

  1. Limited resources and alternative uses.
  2. Other options are given up.
  3. Value of the next best alternative forgone.
  4. Helps compare alternatives before allocating resources (supported by “when one alternative is chosen…”).

Source 2

  1. Central planning authority/government.
  2. Government has ownership in most resources and sectors.
  3. Follow central authority’s targets rather than market demand.
  4. Limited private ownership and strict permits restrict competition (supported by “restricts competition among private enterprises”).
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All questions are answerable from the NCERT chapter text. Reviewed by GFIS faculty.