Factors of Production NCERT CBSE Class 8 question bank Chapter 7 MCQs, Short and Long type Questions with Answers

7. Factors of Production

Section A: Multiple Choice Questions  and Answers

1. The resources used to produce goods and services are called:
a) Goods
b) Services
c) Factors of production
d) Consumption
Answer: c

2. Which of the following is NOT a factor of production?
a) Land
b) Labour
c) Money
d) Entrepreneurship
Answer: c

3. In economics, land includes:
a) Only agricultural land
b) Only soil
c) Natural resources
d) Buildings
Answer: c

4. Which of the following is a natural resource?
a) Machinery
b) Factory
c) Forest
d) Loan
Answer: c

5. Labour refers to:
a) Only physical work
b) Only mental work
c) Physical and mental effort
d) Machines
Answer: c

6. Human capital refers to:
a) Number of workers
b) Quality of labour
c) Physical strength
d) Machines
Answer: b

7. Which improves human capital the most?
a) Pollution
b) Education and training
c) Migration
d) Population growth
Answer: b

8. Which factor improves productivity directly?
a) Ill health
b) Training
c) Unemployment
d) Pollution
Answer: b

9. Which country follows the concept of ‘Kaizen’?
a) India
b) Germany
c) Japan
d) USA
Answer: c

10. Kaizen means:
a) Innovation
b) Competition
c) Continuous improvement
d) Automation
Answer: c

11. Capital includes:
a) Land only
b) Labour only
c) Money and machines
d) Natural resources
Answer: c

12. Which is an example of physical capital?
a) Skills
b) Knowledge
c) Machinery
d) Health
Answer: c

13. Interest is paid on:
a) Shares
b) Profit
c) Loan
d) Rent
Answer: c

14. Dividend is paid to:
a) Workers
b) Bank
c) Shareholders
d) Consumers
Answer: c

15. Entrepreneurship involves:
a) Avoiding risk
b) Taking risk
c) Only labour
d) Only capital
Answer: b

16. Who combines all factors of production?
a) Worker
b) Consumer
c) Entrepreneur
d) Government
Answer: c

17. A startup usually aims at:
a) Slow growth
b) No risk
c) Rapid growth
d) No technology
Answer: c

18. J.R.D. Tata is known as:
a) Scientist
b) Entrepreneur
c) Teacher
d) Politician
Answer: b

19. Technology means:
a) Tools only
b) Machines only
c) Application of scientific knowledge
d) Labour
Answer: c

20. Which technology is used for digital payments?
a) GPS
b) Robot
c) UPI
d) Drone
Answer: c

21. Which sector is labour-intensive?
a) Semiconductor industry
b) Satellite production
c) Agriculture
d) Petrochemical industry
Answer: c

22. Capital-intensive production uses more:
a) Labour
b) Machines
c) Land
d) Natural resources
Answer: b

23. Supply chain refers to:
a) Only transport
b) Network of production and distribution
c) Only factory work
d) Only selling
Answer: b

24. COVID-19 affected production mainly due to:
a) Overpopulation
b) Supply chain disruption
c) Technology growth
d) Education
Answer: b

25. Demographic dividend refers to:
a) High population
b) Old population
c) Young working population
d) Unemployment
Answer: c

26. India’s CSR law was introduced in:
a) 2000
b) 2010
c) 2014
d) 2020
Answer: c

27. CSR requires companies to spend:
a) 1% profit
b) 2% profit
c) 5% profit
d) 10% profit
Answer: b

28. Recycling helps in:
a) Pollution
b) Resource conservation
c) Waste generation
d) Resource depletion
Answer: b

29. Which is an example of ancient Indian skill heritage?
a) Robotics
b) Stitched shipbuilding
c) Satellite
d) UPI
Answer: b

30. Shilpa Shastras are related to:
a) Agriculture
b) Art and architecture
c) Trade
d) Medicine
Answer: b

31. Tools were worshipped in ancient India during:
a) Diwali
b) Holi
c) Ayudha Puja
d) Pongal
Answer: c

32. Which is NOT a responsibility of businesses?
a) Fair wages
b) Safe workplace
c) Pollution
d) Skill development
Answer: c

33. Healthcare improves human capital by:
a) Increasing illness
b) Reducing productivity
c) Improving efficiency
d) Reducing education
Answer: c

34. Education mainly develops:
a) Machines
b) Knowledge
c) Land
d) Capital
Answer: b

35. Which factor is limited in nature?
a) Labour
b) Capital
c) Land
d) Technology
Answer: c

36. Entrepreneurs earn:
a) Wages
b) Rent
c) Profit
d) Salary
Answer: c

37. Rent is the reward of:
a) Labour
b) Capital
c) Land
d) Entrepreneurship
Answer: c

38. Wages are paid for:
a) Capital
b) Labour
c) Land
d) Profit
Answer: b

39. Profit is the reward for:
a) Labour
b) Capital
c) Entrepreneurship
d) Land
Answer: c

40. All factors of production are:
a) Independent
b) Competitive only
c) Interconnected
d) Optional
Answer: c

Section B: Short type Questions and Answers

1. What are the factors of production? The four factors of production are land, labour, capital, and entrepreneurship.
2. Define 'land' in an economic context. In economics, 'land' includes geographical land and all natural resources like soil, water, air, minerals, oil, and natural gas.
3. What is labour? Labour refers to the physical and mental effort used by people in the production of goods and services.

 

4. Define human capital. Human capital refers to the specialized skills, knowledge, abilities, and expertise individuals possess that allow them to perform labour more efficiently.
5. What is physical capital? Physical capital consists of human-made resources used in production, such as machinery, tools, buildings, and vehicles.

 

6. Who is an entrepreneur? An entrepreneur is a person who identifies a problem, comes up with an innovative idea, takes risks, and combines other factors of production to start a business.

 

7. What is a startup? A startup is an entrepreneurial venture with limited resources that aims for rapid growth and expansion, often by leveraging technology.
8. Define technology as an enabler of production. Technology is the application of scientific knowledge that allows businesses to produce more goods with the same or fewer inputs.

 

9. What is interest? Interest is the money a borrower pays to a lender for using their money for a specific period.

10. What is a dividend? A dividend is a share of a company's profits paid regularly to its shareholders.

 

11. What is the demographic dividend? It refers to the economic growth potential that results from a country having a large working-age population relative to its dependents.

12. Define the term 'skill'. A skill is the ability to perform an activity or job well through practice and training.

13. What is 'kaizen'? Kaizen is a Japanese concept meaning 'continuous improvement,' which helps achieve higher standards of living.

14. What is the Adult Literacy Rate? It is the percentage of people aged 15 and above who can read and write a short, simple statement about their everyday life with understanding.

15. What is Corporate Social Responsibility (CSR)? CSR is a practice where businesses address social and environmental concerns in their operations to benefit society and biodiversity.

16. Name India's first nation-wide CSR law requirement. India's 2014 law mandates certain companies to spend 2% of their average profits from the last three years on CSR activities.

17. What is a supply chain? A supply chain is a network of individuals, organizations, and resources involved in the production and sale of a product.

18. What does 'capital-intensive' mean? Production is capital-intensive when it requires a higher proportion of capital and specialized machinery compared to labour.

19. What does 'labour-intensive' mean? Production is labour-intensive when it relies more heavily on human effort than on machinery or capital.

20. Give an example of an ancient Indian production technique. The "stitched shipbuilding" technique involved stitching wooden planks with cords instead of nails to create flexible ships for maritime trade.

 

Section C: Long type Questions and Answers

1.     Explain the role of education and training as facilitators of human capital. Education provides the foundational knowledge and expertise needed to solve real-world problems. Training is the process of learning specific skills required for a particular job. Together, they prepare individuals to excel in their careers, such as an engineering student applying design principles to build durable infrastructure.

 

2.     How does healthcare contribute to the development of human capital? Good health is essential for cognitive development, allowing children to learn effectively in school. For workers, a sound body enables them to be more creative and productive in shorter time periods, reducing absences due to illness and allowing them to contribute their best mental and physical effort.

 

3.     Discuss the impact of social and cultural influences on a nation's economic progress. A culture of hard work and continuous improvement, like Japan’s 'kaizen,' has historically helped countries achieve higher standards of living. Similarly, the German work ethic, which values punctuality and attention to detail, established Germany as a global leader in manufacturing and technology.

 

4.     What are the primary functions and characteristics of an entrepreneur? An entrepreneur identifies problems and creates innovative solutions. They combine land, labour, and capital, take significant financial and personal risks, and make key decisions regarding business operations. Their vision often creates jobs and supports the welfare of society.

 

5.     Describe how technology has eliminated geographical barriers to knowledge and jobs. Government platforms like SWAYAM provide free online courses (MOOCs) that allow students to learn subjects like robotics from anywhere at their own pace. Additionally, portals like the National Career Service help people find job opportunities across different sectors and regions, connecting Indian talent with global markets.

 

6.     Explain the interconnectedness of the factors of production. No factor of production works in isolation; they must be combined to create goods and services. They complement each other, meaning that if one factor is missing or misused, production can become inefficient or stop entirely. For example, mass-producing a mobile phone requires land for a factory, capital for machinery, skilled engineers (labour), and an entrepreneur to organize them.

 

7.     What are the responsibilities of businesses towards natural resources? Producers must use natural resources like water and minerals responsibly because they are limited and can be easily harmed. For instance, factories should recycle wastewater to prevent polluting rivers, and electronics manufacturers should manage e-waste like lead and mercury to avoid soil degradation.

 

8.     Detail the responsibilities of businesses towards their workers. Businesses are responsible for providing fair compensation and safe working conditions. They must also invest in skill development and training to keep their workforce competitive. Furthermore, they must adhere to workplace rights, preventing discrimination and providing benefits like healthcare or paid leave.

 

9.     Discuss J.R.D. Tata’s contribution to entrepreneurship in India. J.R.D. Tata was a visionary entrepreneur who believed businesses should serve society. He established India's first airline (Tata Airlines) and expanded the Tata Group into steel, power, and chemicals. He was renowned for providing excellent working conditions and received the Bharat Ratna for his service to the nation.

 

10. Explain how the stock market helps large companies raise capital. When personal savings and bank loans are insufficient for expansion, large companies raise money from the general public through the stock market. They sell 'shares' of their business to the public. In return, investors receive a portion of the company's profits, known as dividends.

 

11. How can technology change the proportion of factors used in production? New techniques can shift the balance between inputs. For example, increased use of machinery in agriculture can reduce the dependence on manual labour. Similarly, 3-D printing technology can help scale up traditional textile production, reviving dying art forms by producing them more efficiently for a larger market.

 

12. Describe the challenges India faces in developing human capital. Despite progress, India faces challenges such as school dropout rates—often due to family financial issues—which result in lost schooling years and lower future productivity. Businesses also struggle when they cannot find workers who possess the specific skills required for modern jobs.

 

13. Why is the demographic dividend important for India's future? With 65% of its population under the age of 35, India has a young, productive workforce. This can lead to rapid economic growth and improved living standards if this population has access to quality education, healthcare, and skill training.

 

14. Compare and contrast labour-intensive and capital-intensive sectors. Labour-intensive sectors, like handicrafts and construction, rely heavily on human effort. In contrast, capital-intensive sectors, such as semiconductor manufacturing or satellite production, require massive investments in specialized machinery and technology.

15. How did ancient Indians perceive work and technology? For ancient Indians, work was a form of devotion and a way to strive for perfection. Tools were considered sacred and worshipped during festivals like Vishwakarmā pūjā. Production involved a unique blend of 'kalā' (art) and 'vidyā' (knowledge) passed through generations.

 

16. What is the significance of the 'shilpa shāstras'? These ancient texts provide detailed guidelines for design and craftsmanship in various fields, including sculpture, architecture, and jewelry. For example, they prescribe exact measurements and proportions for figures in sculptures, ensuring a high level of excellence across centuries.

 

17. What are the consequences of supply chain disruptions? When businesses rely on inputs from far-off locations instead of local sources, any disruption in the network—such as during the COVID-19 pandemic—can cause production to halt. This highlights the vulnerability of global interconnectedness in production.

 

18. How does technology improve day-to-day business operations? Modern technology makes processes faster and cheaper. For instance, digital payments via UPI allow for instant transactions. Farmers use technology for weather updates, and GPS helps discover the most efficient routes for transporting goods, reducing time and fuel costs.

 

19. Explain the difference between 'labour' and 'human capital'. 'Labour' is the basic physical and mental effort used in production. 'Human capital' refers to the quality and efficiency of that labour, driven by specialized skills, expertise, and knowledge. While anyone can provide labour, human capital is what adds higher economic value through expertise.

 

20. Discuss the importance of sustainable practices in production. Sustainable practices ensure that resources are replenished for future use. Producers should adopt methods that reduce waste and avoid pollution, such as using recycled products as inputs. This allows society to meet current needs without compromising the ability of future generations to meet theirs.

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