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Questions and Answers
Which characteristic must a commodity possess to be considered wealth?
Which characteristic must a commodity possess to be considered wealth?
- Popularity
- Utility (correct)
- Availability
- High demand
What does scarcity imply regarding a commodity in the context of wealth?
What does scarcity imply regarding a commodity in the context of wealth?
- It must be scarce in supply relative to its demand. (correct)
- It should have a low market value.
- It must be readily available to everyone.
- It should be easy to manufacture.
In the context of wealth, what does transferability refer to?
In the context of wealth, what does transferability refer to?
- The ability to be sold or given from one person to another. (correct)
- The ability to increase in value over time.
- The ability to be exchanged for another commodity.
- The ability to remain in one's possession indefinitely.
Which type of income represents earnings that change over time?
Which type of income represents earnings that change over time?
What type of income is described as the purchasing power of money income?
What type of income is described as the purchasing power of money income?
What does personal disposable income represent?
What does personal disposable income represent?
Which of the following is NOT a characteristic of wealth?
Which of the following is NOT a characteristic of wealth?
Which category of income is defined by specific terms outlined in a contract?
Which category of income is defined by specific terms outlined in a contract?
What best describes physical transferability?
What best describes physical transferability?
Which of the following is a characteristic of notional transferability?
Which of the following is a characteristic of notional transferability?
What is the maximum distance up to which India's territorial waters extend into the sea?
What is the maximum distance up to which India's territorial waters extend into the sea?
What distinguishes earned income from unearned income?
What distinguishes earned income from unearned income?
Which of the following economic systems is characterized by the government controlling major industries?
Which of the following economic systems is characterized by the government controlling major industries?
Which of the following examples best fits unearned income?
Which of the following examples best fits unearned income?
Who is known for articulating views on the concept of 'Artha' in economics?
Who is known for articulating views on the concept of 'Artha' in economics?
What type of income is classified as residual income?
What type of income is classified as residual income?
What does 'Shastra' mean in the context of Kautilya's definition of economics?
What does 'Shastra' mean in the context of Kautilya's definition of economics?
Which of the following is NOT included in economic activities?
Which of the following is NOT included in economic activities?
Which best defines the role of an entrepreneur in an economy?
Which best defines the role of an entrepreneur in an economy?
Which of the following states' boundary has not been verified by the concerned governments?
Which of the following states' boundary has not been verified by the concerned governments?
Which of the following best represents an example of a physical transfer of goods?
Which of the following best represents an example of a physical transfer of goods?
What is a mixed economy characterized by?
What is a mixed economy characterized by?
The interoperability of infrastructure in India can be best described as?
The interoperability of infrastructure in India can be best described as?
What is primarily responsible for modern scientific progress influencing economics?
What is primarily responsible for modern scientific progress influencing economics?
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Study Notes
Wealth
- Wealth refers to anything with market value that can be exchanged for money.
- To be considered wealth, a commodity must:
- Have utility: Satisfy human wants, e.g. furniture, refrigerator.
- Be scarce: Limited supply compared to demand, e.g. all economic goods.
- Be transferable: Move from person to person and place to place.
- Physical transferability: Actual transfer, e.g. vehicle.
- Notional transferability: Transfer of ownership rights, e.g. land.
- Be external to the human body, e.g. bag, chair.
Income
- Personal Income: Earnings from all sources.
- Personal Disposable Income (PDI): Income remaining after paying direct taxes.
- Types of Income:
- Fixed income: Stable over time, e.g. rent.
- Fluctuating income: Changes over time, e.g. profit.
- Money income: Income in actual currency, e.g. $5,000.
- Real income: Purchasing power of money income, e.g. commodities.
- Contractual income: Paid based on contract terms, e.g. rent.
- Residual income: Income after paying production factors, e.g. profit.
- Earned income: Income from productive activities, e.g. wages.
- Unearned income: Income received without productive activity, e.g. lottery prizes.
Economic Activity
- Divided into four types: Production, distribution, exchange, and consumption.
Factors of Production
- Resources required for production:
- Land: Natural resources, e.g. forests, minerals.
- Labour: Human effort used in production.
- Capital: Man-made resources used in production, e.g. machinery.
- Entrepreneur: Organizer responsible for production and profit.
Economic Systems
- Capitalism: Private ownership of resources, free market competition.
- Socialism: Shared ownership of resources, government controls production.
- Mixed Economy: Combines elements of capitalism and socialism.
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