Factors of Production Class VIII SST Notes NCERT CBSE

 

Chapter 7: Factors of Production

1. Introduction: Production and Factors of Production

Every good or service we use (food, clothes, phones, furniture, etc.) is produced through a production process.

This process requires inputs or resources, which are called factors of production.

Factors of Production

These are the resources used to produce goods and services.

Businesses combine these factors to:

• Produce goods and services
• Generate employment
• Carry out economic activities

Example:
Ratna’s restaurant required land (place), labour (workers), capital (money and equipment), and entrepreneurship (her idea and risk-taking).

 

2. Classification of Factors of Production

In economics, factors of production are classified into four main types:

1. Land
2. Labour
3. Capital
4. Entrepreneurship

Technology acts as a facilitator or enabler of production.

 

3. Land (Natural Resources)

In economics, land does not mean only soil or land surface.

Meaning of Land

Land includes all natural resources, such as:

• Soil
• Forests
• Water
• Air
• Sunlight
• Minerals
• Oil and natural gas

Use of Land

• Businesses may purchase land or pay rent to use it.
• Natural resources are essential inputs for production.

 

4. Labour (Human Resources)

Meaning of Labour

Labour refers to physical and mental effort used in production.

Examples:

• Farmers, carpenters, construction workers
• Teachers, doctors, engineers

Each worker contributes differently based on:

• Skill
• Knowledge
• Strength
• Experience

 

5. People as a Resource

Human beings play a central role in production because they:

• Apply knowledge
• Use skills
• Take decisions

Examples:

• Scientists invent technologies
• Chefs create new recipes
• Police officers maintain law and order

 

6. Human Capital

Meaning of Human Capital

Human capital refers to the quality of labour, not just effort.

It includes:

• Knowledge
• Skills
• Expertise
• Abilities
• Experience

Difference:

• Labour = effort
• Human capital = skill + efficiency of labour

 

7. Facilitators of Human Capital

(A) Education and Training

Education:

• Develops knowledge and thinking ability
• Starts with literacy and moves to specialised learning

Training:

• Provides practical, hands-on skills
• Helps apply knowledge to real-world problems

Example:
A civil engineer learns theory in class and gains skills through field training.

 

(B) Healthcare

Good health:

• Improves learning ability
• Increases productivity
• Reduces absence from work

Healthy workers:

• Work faster
• Are more creative
• Perform better mentally and physically

 

(C) Social and Cultural Influences

Work culture strongly affects human capital.

Examples:

• Japan: Concept of Kaizen (continuous improvement)
• Germany: Discipline, punctuality, attention to quality

Such values help nations achieve:

• High productivity
• Better living standards

 

8. Challenges to Human Capital in India

• Literacy has improved, but challenges remain
• Adult Literacy Rate (2023):
• Males: 85%
• Females: 70%

Effects of Poor Human Capital

• School dropouts lose future earning potential
• Businesses face difficulty finding skilled workers

 

9. Demographic Dividend

India has a young population:

• 65% of people are below 35 years

Meaning

Demographic dividend refers to economic growth due to a large working-age population.

Condition

To benefit, people must have:

• Quality education
• Healthcare
• Skills and training

 

10. Importance of All Jobs

No job is unimportant.

If essential workers stop working:

• Streets will not be cleaned
• Crops will not be grown
• Patients will not be treated

All occupations contribute to society.

 

11. India’s Ancient Skill Heritage

In ancient India:

• Work was considered worship
• Tools were respected (Ayudha Puja)

Features:

• Combination of Kala (art) and Vidya (knowledge)
• Skills passed through generations

Shilpa Shastras

Ancient texts providing:

• Exact design rules
• Measurements
• Proportions for art and architecture

 

12. Traditional Techniques: Stitched Shipbuilding

• Used over 2000 years ago
• Wooden planks stitched with cords
• Flexible and suitable for Indian Ocean trade

Declined after European arrival in the 16th century.

 

13. Capital

Meaning of Capital

Capital includes money and man-made resources used in production.

Examples:

• Machinery
• Tools
• Equipment
• Vehicles
• Buildings
• Computers
• Loans and money

 

Sources of Capital

• Personal savings
• Family and friends
• Bank loans (with interest)
• Stock market (for large companies)

Stock Market

• Companies sell shares
• Shareholders receive dividends

 

14. Entrepreneurship

Meaning

Entrepreneurship means:

• Starting a business
• Solving problems with innovation

Role of an Entrepreneur

An entrepreneur:

• Identifies a problem
• Takes risks
• Combines factors of production
• Makes key decisions
• Creates jobs
• Serves society

 

Startup

A startup is:

• A new business
• Limited resources
• Focused on rapid growth
• Uses technology

 

15. Case Study: J.R.D. Tata

• One of India’s greatest entrepreneurs
• Started India’s first airline (Air India)
• Believed businesses should serve society
• Emphasised worker welfare
• Awarded Bharat Ratna (1992)

 

16. Technology: An Enabler of Production

Meaning

Technology is the application of scientific knowledge.

Examples:

• Cameras
• Drones
• Robots
• UPI payments
• GPS systems

Technology:

• Increases efficiency
• Reduces cost and time
• Improves quality

Old technologies may continue if useful (e.g., pulley, wheelbarrow).

 

17. Technology and Skill Development

Government platforms:

• SWAYAM: Free online courses
• National Career Service: Job opportunities

Technology:

• Removes geographical barriers
• Enables learning anytime, anywhere

 

18. Interconnection of Factors of Production

Factors used together:

• Land
• Labour
• Capital
• Entrepreneurship
• Technology

Types of Production

• Labour-intensive: Agriculture, handicrafts
• Capital-intensive: Semiconductors, satellites

If one factor is missing:

• Production becomes inefficient or stops

 

19. Supply Chain

Meaning

Supply chain is a network of people, resources, activities, and technology involved in production and sale.

Example:
During COVID-19, global supply chain disruptions halted production.

 

20. Responsibilities Towards Factors of Production

(A) Towards Natural Resources

• Use resources sustainably
• Prevent pollution
• Recycle waste

Examples:

• Leather industry pollution
• E-waste from mobile phones

 

(B) Towards Workers

Businesses must ensure:

• Fair wages
• Safe working conditions
• Skill development
• Worker rights and benefits

 

21. Corporate Social Responsibility (CSR)

CSR means:

• Businesses working for social and environmental welfare

India:

• First country to mandate CSR (2014)
• Companies must spend 2% of average profits on CSR

 

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Answers to Questions and Activities (Page 182)

1. Factor Comparison: The factors of production differ in their nature: Land is a natural resource, Labour is human effort, Capital is man-made tools/money, and Entrepreneurship is the organization and risk-taking. Difficulties in classification often arise because some items overlap (e.g., is a skilled artisan 'labour' or 'human capital'?).
2. Capital Differences: Physical capital consists of tangible objects like machinery, buildings, and tools used in production. Human capital is intangible; it refers to the knowledge, skills, and health embodied in people that make them productive.
3. Technology’s Role: Technology provides access to global knowledge through online platforms (like MOOCs), allows for specialized training through simulations, and helps people learn new skills faster and more efficiently than traditional methods.
4. Personal Skill Development: (Individual response) For example: "I would learn coding because it is a foundational skill for the modern digital economy and allows me to create software solutions for real-world problems."
5. Entrepreneurship as the "Driving Force": Yes, because while land, labour, and capital are necessary, they remain idle without an entrepreneur. The entrepreneur is the one who takes the initiative to combine these factors, take risks, and innovate to create value.
6. Labour vs. Technology: Technology can replace repetitive physical labour (e.g., robotic arms in car assembly). Whether it is "good" or "bad" depends on the context: it increases efficiency and safety but can lead to job displacement for unskilled workers, requiring them to upskill.
7. Human Capital Facilitators: Education provides the theoretical foundation, while skill training provides practical application. They are complementary; education makes a person more "trainable," and training makes an educated person "employable."
8. Business Simulation (Steel Water Bottles):
• Inputs: Land (factory space), Labour (factory workers, designers), Capital (steel sheets, molding machines, electricity), Entrepreneurship (the founder's plan).
• Missing Factor: If Capital (machinery) is missing, production cannot happen at scale; if Labour is missing, the machines cannot be operated.
9. Entrepreneur Interview: (Activity-based) Questions usually focus on: What problem did you want to solve? How did you gather your initial capital? What was the biggest risk you took?

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Answers to "Think Like an Economist" (Page 183)

In these scenarios, you are Ratna, the owner of "Pause Point":

• Situation I (Rent Hike):
• Initially, you might try to absorb some cost, but if the rent doubles, you may have to raise prices slightly or find ways to reduce other costs (like waste).
• Looking for a cheaper location is an option, but you must consider if the new location has the same number of "highway travellers" (customers).
• Situation II (Labour Shortage):
• The remaining workers might manage for a day or two, but they will eventually burn out, leading to poor food quality or slow service.
• You may need to offer a higher salary or better benefits if there is a shortage of skilled cooks in that area.
• Situation III (Technology Investment):
• Investing in a high-speed oven or a digital billing system will increase production speed and improve quality (consistency).
• It helps reach more customers by reducing wait times, making the restaurant more attractive to busy travellers.
• Situation IV (Competition):
• To keep customers, you should focus on unique selling points (like a signature dish) or loyalty rewards.
• Improving service and maintaining high hygiene standards often works better than just reducing prices, which might hurt your profit margins.
• Situation V (Policy):
• Potential changes include simplifying licensing processes, providing better infrastructure (like better highway lighting/signage), or offering tax incentives for small businesses that employ local people.

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Constitutional Design

1. Who was the leader of the African National Congress (ANC)?

a) J. Nehru

b) B. R. Ambedkar

c) Nelson Mandela

d) Desmond Tutu

2. Apartheid means:

a) Equality of all races

b) Voting rights for all

c) Separation of races

d) Rule of majority

3. Who is known as the Father of the Indian Constitution?

a) Rajendra Prasad

b) Jawaharlal Nehru

c) B. R. Ambedkar

d) Sardar Patel

4. The Indian Constitution came into effect on:

a) 15 August 1947

b) 26 January 1949

c) 26 January 1950

d) 26 November 1950

5. The Constitution of India was adopted on:

a) 26 January 1947

b) 26 November 1949

c) 15 August 1947

d) 15 August 1950

6. Who was the President of the Constituent Assembly?

a) Jawaharlal Nehru

b) Dr. Rajendra Prasad

c) B. R. Ambedkar

d) Vallabhbhai Patel

7. Which movement influenced the makers of the Indian Constitution?

a) French Revolution

b) Russian Revolution

c) Indian National Movement

d) American Revolution

8. The term “We the People” signifies:

a) Kings rule the country

b) People are the source of authority

c) Only leaders have power

d) Judiciary rules

9. Which country’s Constitution inspired India for Fundamental Rights?

a) USA

b) France

c) USA

d) Britain

10. Who prepared the draft of the Indian Constitution?

a) Nehru Committee

b) Drafting Committee under B. R. Ambedkar

c) British Parliament

d) Cabinet Mission

11. Which revolution inspired the idea of fraternity in the Constitution?

a) French Revolution

b) Russian Revolution

c) American Revolution

d) Industrial Revolution

12. How many Articles did the original Constitution of India contain?

a) 200

b) 295

c) 395

d) 500

13. Which country’s Constitution influenced India’s Parliamentary system?

a) USA

b) Britain

c) South Africa

d) Japan

14. The Preamble of the Indian Constitution declares India as:

a) Federal, Democratic, Socialist

b) Sovereign, Socialist, Secular, Democratic, Republic

c) Federal, Secular, Republic

d) National, Socialist, Republic

15. The Constitution of India was drafted by:

a) Parliament

b) Constituent Assembly

c) British Parliament

d) Cabinet

16. The idea of Justice – social, economic, political – came from:

a) America

b) Russian Revolution

c) Britain

d) Japan

17. Which Act gave Indians the right to frame their own Constitution?

a) Regulating Act 1773

b) Government of India Act 1919

c) Cabinet Mission Plan 1946

d) Indian Independence Act 1947

18. The Indian Constitution was drafted in how many days?

a) 1 year

b) 2 years

c) 2 years 11 months 18 days

d) 5 years

19. Who gave the famous speech “Tryst with Destiny”?

a) Mahatma Gandhi

b) Jawaharlal Nehru

c) B. R. Ambedkar

d) Subhash Chandra Bose

20. The Preamble of India begins with:

a) In the name of God

b) We the People of India

c) Truth alone triumphs

d) Justice for all

General Instructions:30∘

CHAPTER-03: NAZISM AND THE RISE OF HITLER

1. Who were the “November Criminals”?
(a) Allied Powers
(b) German Communists
(c) Weimar politicians who signed the Treaty of Versailles
(d) Nazi leaders
👉 Ans: (c) Weimar politicians who signed the Treaty of Versailles

2. Which act gave Hitler full powers?
(a) Enabling Act
(b) Emergency Act
(c) Dictatorship Act
(d) Army Act
👉 Ans: (a) Enabling Act

3. Hitler’s secret police was called:
(a) Gestapo
(b) SS
(c) SA
(d) Stasi
👉 Ans: (a) Gestapo

4. The Nazi slogan was:
(a) Germany for All
(b) One People, One Empire, One Leader
(c) World Revolution
(d) Power to the Workers
👉 Ans: (b) One People, One Empire, One Leader

5. What does ‘Lebensraum’ mean?
(a) Living Space
(b) Life Room
(c) Homeland
(d) War Front
👉 Ans: (a) Living Space

6. What was the German parliament called?
(a) Congress
(b) Reichstag
(c) Senate
(d) Duma
👉 Ans: (b) Reichstag

7. Who controlled Nazi propaganda?
(a) Himmler
(b) Goebbels
(c) Goering
(d) Hess
👉 Ans: (b) Goebbels

8. Which youth organisation trained German boys in Nazi ideology?
(a) Hitler Youth
(b) German Scouts
(c) Young Nazis
(d) Aryan League
👉 Ans: (a) Hitler Youth

9. Women in Nazi Germany were encouraged to focus on:
(a) Politics
(b) Army
(c) Children, Kitchen, Church
(d) Business
👉 Ans: (c) Children, Kitchen, Church

10. What medal was given to German mothers with many children?
(a) Gold Cross
(b) Iron Cross of Motherhood
(c) Bronze Medal
(d) Aryan Award
👉 Ans: (a) Gold Cross

11. Hitler became dictator after the death of:
(a) Goebbels
(b) Hindenburg
(c) Bismarck
(d) Kaiser Wilhelm
👉 Ans: (b) Hindenburg

12. The Nazi racial law of 1935 was called:
(a) Aryan Law
(b) Nuremberg Law
(c) German Code
(d) Nazi Code
👉 Ans: (b) Nuremberg Law

13. Which international event deepened the crisis of Weimar Germany?
(a) WWI
(b) French Revolution
(c) WWII
(d) Great Depression
👉 Ans: (d) Great Depression

Q14. What does Holocaust refer to?
(a) Nazi propaganda
(b) Treaty of Versailles
(c) Mass killing of Jews
(d) Nazi dictatorship
👉 Ans: (c) Mass killing of Jews

15. Hitler’s propaganda minister was:
(a) Goering
(b) Goebbels
(c) Himmler
(d) Bormann
👉 Ans: (b) Goebbels

16. The word “Holocaust” literally means:
(a) Total destruction by fire
(b) Survival
(c) Liberation
(d) Victory
👉 Ans: (a) Total destruction by fire

17. Hitler Youth trained children in:
(a) Democracy
(b) War and discipline
(c) Music and art
(d) Farming only
👉 Ans: (b) War and discipline

18. Hitler’s aim was to:
(a) Create a democratic Germany
(b) Expand German empire and racial supremacy
(c) Unite Europe under peace
(d) Stop wars forever
👉 Ans: (b) Expand German empire and racial supremacy

19. Who were called ‘undesirables’ in Nazi Germany?
(a) Aryans
(b) Jews, Roma, disabled, communists
(c) Industrialists
(d) Army officers
👉 Ans: (b) Jews, Roma, disabled, communists

20. Nazi education was designed to