Ch 1 notes Economics

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Chapter 1 The Story of Palampur

Very Short Answer Questions


1. Where is Palampur located?
Palampur is a hill station and a municipal corporation situated in the Kangra District in
the Indian state of Himachal Pradesh.
2. What is the main economic activity in village Palampur?
Answer: The main economic activity in village Palampur is agriculture.
3. What are the factors of production?
Answer: Land, labour, physical capital and human capital are the factors of production.
4. What was the major advantage of using HYV seeds in agriculture?
Answer: The major advantage of using HYV seeds in agriculture is growing more crops
on the same piece of land.
5. What are the non-farming activities being carried out in Palampur?
Answer: Some of the non-farming activities being carried out in Palampur include
manufacturing, transport, shop keeping and computer education.
6. Why is loss of soil fertility occurring as an effect of the Green Revolution?
Answer: During the Green Revolution, due to the extra crops produced which utilized
the soil nutrients fully, no nutrients were left for the next crop.
7. What is the standard unit for measurement of agricultural land?
Answer: Hectare is the standard unit for measurement of agricultural land. Bigha and
Guintha are local units used in different parts of India.
8. Which crop out of rice, sugarcane or wheat is a Kharif crop?
Answer: Rice is a Kharif crop.
9. During which season do farmers of Palampur grow jowar and bajra?
Answer: During rainy season (kharif) farmers of Palampur grow jowar and bajra.
10. In which season is wheat grown in Palampur village?
Answer: During rabi season (winter) wheat is grown in Palampur village.
11. What are ‘Bigha’ and ‘Guintha’?
Answer: Bigha and Guintha are the measuring units of land area in villages.
12. What is the basic difference between two factors of production-land and capital?
Answer: Land is a natural resource whereas money is man-made. It is possible to
increase capital, whereas land is fixed.
Short Answer Type Questions
1. How do chemical fertilizers affect the soil?
Answer: Chemical fertilizers provide minerals which dissolve in water and are
immediately available to plants. But these may not be retained in the soil for long. They
may escape from the soil and pollute groundwater, rivers and lakes.
2. From where small farmers borrow money?
Answer: Small farmers either borrow from large farmers or the village moneylenders or
the traders who supply various inputs for cultivation. The rate of interest on such loans is
very high which makes it difficult for them to repay.
3. What do large and medium farmers do with their surplus farm products?
Answer: Large and medium farmers sell the surplus farm products. A part of the
earnings is saved and kept for buying capital for the next season. Some farmers might
also use the savings to buy cattle, trucks or to set up shops.
4. In what way is Kareem’s capital and labour different from Mishrilal?
Answer: Both have fixed capital in the form of machines, but Kareem has a larger fixed
capital because he has asset in the form of computers which are more expensive than the
sugarcane crushing machine. Kareem has also employed educated and qualified computer
teachers, whereas Mishrilal’s labour is mainly unskilled labor.
Long Answer Type Questions
1. List the changes in Palampur due to the advent of electric power in the village.
Answer: The advent of electric power in Palampur has brought about the following
changes:
(i) Irrigation is now done through electric run tube wells, which has reduced the
dependence of the farmers upon rainfall and enables larger areas of land to be irrigated.
(ii) Irrigation improvement allowed farmers to grow three different crops in a year.
(iii) It enabled Mishrilal to set up a sugarcane crushing machine so that he can sell
jaggery manufactured by him to the traders at Shahpur.
2. What is the difference between multiple cropping and modern farming method?
Answer: Multiple Cropping: To grow more than one crop on a piece of land during the
year is known as multiple cropping. It is the most common way of increasing production
on a given piece of land.
Modern Farming Method The farmers of Punjab, Haryana and Western Uttar Pradesh use
HYV seeds, tube wells for irrigation, chemical fertilizers and pesticides, as well as
machinery like tractors and threshers to increase the production. All these measures
comprise what are known as modern farming methods.
3. What are the main factors for production of goods and services?
Answer: (i) The first requirement is land and other natural resources like water, forests,
minerals, etc.
(ii) The second requirement is labor, i.e., the people who will do the work. Some
activities require educated workers to perform the necessary task and other activities
require workers who can do manual work.
(iii) The third requirement is physical capital, i.e., the variety of inputs required at every
stage during production. It includes fixed capital and working capital.
(iv) Fourth requirement-knowledge and entrepreneur.
4. State the main reasons why farmers are able to grow three different crops in a
year in Palampur.
Answer: The main reasons are:
(i) A well-developed system of irrigation.
(ii) Electricity came early to Palampur. It was perceived to help in transforming the
system of irrigation as the earlier Persian wheels, till then, were used to draw water from
wells to irrigate small fields.
(iii) People noticed that electric-run tubewells could irrigate much large areas of land
more effectively.
5. How surplus farm products are sold by the farmers?
Answer: Let us assume that farmers have produced wheat on their land. They retain a
part of the wheat for the family consumption and sell the surplus wheat. Small farmers
like Savita have little surplus wheat because their total production is small and from this a
substantial share is kept for their own family needs. The medium and large farmers
supply wheat to the market which the traders buy and sell it further to shopkeepers in the
towns and cities.
6. Define Physical Capital, Fixed Capital, Working Capital and Human Capital with
examples.
Answer: (i) Physical capital: Physical capital is the variety of inputs required at every
stage during production. It includes fixed capital and working capital.
(ii) Fixed capital: Tools and machines range from a plough to a tractor and sophisticated
machines like generators, turbines, computers, etc. The tools, machines, buildings which
can be used in production over many years are called fixed capital.
(iii) Working capital: Production requires a variety of raw materials. It requires money
to make payments and buy other necessary items. Raw materials and money in hand are
called working capital. Unlike tools and machines, these are used up in production.
For example: Yarn required by a weaver; clay used by a potter.
(iv) Human capital: One needs knowledge and enterprise to be able to put together land,
labour and physical capital and produce an output; either to use it by oneself or to sell in
the market. This is known as human capital, which enables better production with human
skill and knowledge.
7. What are the merits and demerits of the Green Revolution?
Answer: Merits of the Green Revolution: Green Revolution introduced a number of
modern farming methods in India.
(i) Higher yield due to the use of HYV seeds.
(ii) Machines like harvesters, tractors and threshers have made ploughing and harvesting
faster and easier.
(iii) Higher yield enabled farmers to sell the surplus food in the market and earn more.
(iv) Pesticides and insecticides are able to protect the crops from pests and insects.
(v) A good irrigation system is able to enhance crop production.
Demerits of the Green Revolution
(i) Loss of soil fertility due to increased use of chemical fertilizers.
(ii) Continuous use of groundwater for tubewell irrigation has reduced the water table
below the ground.
(iii) The chemical fertilizers, easily soluble in water, can dissolve in the groundwater and
pollute it.
(iv) They can kill bacteria and other micro-organisms helpful for the soil.
(v) Excessive use of fertilizers can also make the soil alkaline and unfit for cultivation.
8. What are the different ways of increasing production? Give examples.
Answer: The different ways of increasing production are:
(a) Multiple cropping: Under this method, more than one crop is raised on the same
piece of land during a year. It is the most common way of increasing production on a
given piece of land. It is possible if a well-developed system of irrigation exists.
Generally, a crop like potato is cultivated between two seasonal crops like rice and wheat.
(b) Modern farming methods: Under modern farming methods, high yielding variety of
seeds and chemicals are used.
(i) High Yielding Variety (HYV) seeds are used in place of the traditional seeds to
increase the production.
(ii) Chemical fertilizers are used instead of cow-dung and natural manure.
(iii) Insecticides, pesticides, herbicides and irrigation through tubewells are sed in
modern farming methods.
(iv) Machines like tractors, harvesters and threshers are used to make the farmer’s job
easier and faster.
9. Which non-farm activities are practiced in Palampur? Write a short note.
Answer: The non-farm activities of Palampur are:
(a) Dairy farming:
(i) People feed their buffaloes with various kinds of grass, jowar, bajra that grows during
the rainy season.
(ii) The milk is sold in nearby villages.
(iii) Some people have set up collection centers and chilling centers from where milk is
transported to far away towns and cities.
(b) Small-scale manufacturing:
(i) Manufacturing in Palampur involves very simple production methods and are done on
a small scale.
(ii) They are carried out mostly at home.
(iii) This is mostly done with the help of family labor. Labor is rarely hired.
(c) Shopkeeping:
(i) Shopkeepers buy various goods from the wholesale market in the cities and sell them
in the village.
(ii) Small general stores in the village sell a wide range of items like rice, wheat, sugar,
oil, biscuits, soap, batteries, candles, toothpaste, pens, pencils, notebooks, and even some
clothes.
(iii) Some families whose houses are closer to the bus stand has used a part of the space
to open small shops. They sell eatables here.
(d) Transport:
(i) Rickshawallahs, tongawallahs, jeep, tractor, truck drivers and people driving the
traditional bullock carts and bogeys are the people in transport services.
(ii) They carry people and goods from one place to another and in return get paid for it.
(iii) The number of people in transport services has risen over the last several years.
(iv) Self-employed: Some people have opened coaching institutes for various kinds of
arts like computer training centers or stitching classes, etc. to obtain profit from a non-
farm activity and train more and more people for better opportunities in their life.
10. How is multiple cropping practiced in Palampur?
Answer: All land is cultivated in Palampur. No land is left vacant. During the rainy
season (kharif) farmers grow jowar and bajra. These plants are used as cattle feed. It is
followed by cultivation of potato between October and December. In the winter season
(rabi) fields are sown with wheat. From the wheat produced, farmers keep enough wheat
for family’s consumption and sell the surplus wheat at the market at Raiganj. A part of
the land area is also devoted to sugarcane which is harvested once every year. Sugarcane
in its raw form, or as jaggery, is sold to traders in Shahpur.

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