Question

Which of the following statements accurately describe the fundamental concepts of Economics ?

1. Economics primarily focuses on the study of wealth and its accumulation.
2. Economic activities are intrinsically linked to human wants and the satisfaction thereof.
3. The core economic problems revolve around deciding what to produce, how to produce, and for whom to produce.
4. Economic decisions are solely based on the availability of technology, irrespective of resource constraints.

• A. None of these
• B. i, iv
• C. ii, iii
• D. iii only

Answer 1

Answer:

C. ii, iii

• Economics is the branch of science that studies economic activities relating to production, distribution, and consumption.

• It is not merely a study of wealth, but is also a study of man and society.

• Man satisfies his wants through the consumption of goods and services. The reward received by participating in the production process is spent on consumption. Therefore, there is a correlation between production, distribution and consumption of goods and services

• Economic decisions are taken by analysing the basic problems in an economy. The basic economic problems are what, how, and for whom to produce.

• There should exist of balance between the wants of the society and the quantity of a product. How to produce is decided on the basis of the availability of resources and technology.

• For example, the services of laborers or machines can be utilized for agricultural activities like preparing land for cultivation, sowing, weeding, harvesting, and threshing. The selection of a particular method is decided on the basis of available resources in an area. The method of production varies with the availability of resources.