Unit Test (Solutions): Factors of Production | Social Science Class 8 - New NCERT PDF Download

Time: 1 Hour
M.M.: 30
Attempt all questions.
Question numbers 1 to 4 carry 1 mark each.
Question numbers 5 and 6 carry 2 marks each.
Question numbers 7 to 10 carry 3 marks each.
Question numbers 11 and 12 carry 5 marks each.

Q1. Which of the following is NOT considered a factor of production?
(a) Land
(b) Labour
(c) Capital
(d) Currency exchange

Ans: (d) Currency exchange
Currency exchange is a financial transaction, not a direct resource used in producing goods and services.  

Q2. Which of the following best describes ‘labour’ in production?
(a) Only manual physical work is done by workers
(b) The creative ideas of entrepreneurs alone
(c) Both physical and mental efforts contributed by people to produce goods and services
(d) Financial contributions to start a business

Ans: (c) Both physical and mental efforts contributed by people to produce goods and services
Labour includes the physical and mental efforts of individuals, such as those of farmers, teachers, or doctors.

Q3. Is it true or false that education and training help improve human capital by increasing skills and knowledge?

Ans: True
Education and training enhance human capital by equipping individuals with skills and knowledge, improving their productivity.  

Q4. Entrepreneurship is mainly characterised by:
(a) Investing large sums of money only in the making of a business
(b) Avoiding challenges and being risk-averse to keep the business safe
(c) Initiating new ventures, taking risks, and managing all production factors
(d) Working only in traditional family businesses

Ans: (c) Initiating new ventures, taking risks, and managing all production factors
Entrepreneurship involves starting new ventures, taking risks, and coordinating land, labour, capital, and technology.  

Q5. Explain why health is important in developing human capital.

Ans: Health is vital for developing human capital because it ensures children can attend school regularly and learn effectively, while healthy workers perform better, stay creative, and avoid absenteeism due to illness.  

Q6. Name two cultural values mentioned that help improve work quality and productivity in countries like Japan and Germany.

Ans: Kaizen (continuous improvement) in Japan and a work ethic valuing punctuality, detail, and quality in Germany.  

Q7. Describe how ancient Indian craftsmen viewed their work and tools.

Ans: Ancient Indian craftsmen saw their work as a spiritual and artistic pursuit, deeply rooted in tradition and dedication.  

• Work as Worship: Viewed work as an offering to a deity or recipient, emphasising devotion and perfection.  
• Sacred Tools: Considered sacred, worshipping them during the Shastra Puja or Āyudha Pūjā.
• Art and Knowledge Fusion: Combined Kala (art) and Vidya (knowledge), passing skills generationally.
• Shilpa Shastras: Followed technical texts with precise guidelines for sculptures, architecture, and crafts.

Q8. Explain the role of capital in production with examples.

Ans: Capital plays a crucial role in production by providing the financial and physical resources needed to create goods and services efficiently.  

• Definition: Includes money and durable assets like machinery, tools, and buildings.  
• Role: Enables businesses to acquire land, hire labour, and operate, enhancing productivity.  
• Examples: Ratna used capital to rent land and buy kitchen equipment for her business; factories use machinery to produce goods.  
• Funding: Businesses may use savings, loans, or stock market shares to raise capital.

Q9. How does technology enable better production and open new opportunities? Give two examples.

Ans: Technology enhances production efficiency and creates new opportunities by applying scientific knowledge to modern challenges.  

• Improved Production: Speeds up processes and reduces effort, e.g., drones spraying fertilisers or robots assisting in surgeries.  
• New Opportunities: Expands access to education and jobs, e.g., SWAYAM offers online courses, and the National Career Service connects people to employment.  
• Examples: UPI enables quick payments, and GPS helps farmers optimise routes.

Q10. Discuss how the factors of production are connected and why all are needed for efficient production.

Ans: The factors of production—land, labour, capital, entrepreneurship, and technology—are interconnected, each playing a vital role in ensuring efficient production.  

• Interconnection: Land provides natural resources, labour applies effort, capital supplies tools and funds, entrepreneurship coordinates efforts, and technology enhances processes.  
• Complementary Nature: A shortage or misuse of one factor, like a lack of capital for machinery, can halt production, as seen during COVID-19 supply chain issues.  
• Varied Proportions: Labour-intensive tasks (e.g., agriculture) rely more on human effort, while capital-intensive tasks (e.g., semiconductors) need advanced equipment.  
• Necessity: All factors are essential; without coordination by entrepreneurs or technological support, efficiency drops, as human effort alone cannot optimise output.

Q11. Describe the responsibilities businesses have towards natural resources and workers when using factors of production.

Ans: Businesses bear significant responsibilities towards natural resources and workers to ensure sustainable and ethical use of production factors.  

• Natural Resources: Must avoid overuse, like reducing river pollution from leather factories or recycling smartphone waste, to preserve resources for future generations.  
• Sustainability: Adopt practices like industrial wastewater recycling to minimise environmental harm and support long-term viability.  
• Workers: Ensure fair pay, safe conditions, and access to training to enhance skills and competitiveness.  
• Legal Compliance: Follow laws on non-discrimination, health care, and paid leave, while practising Corporate Social Responsibility (CSR) to benefit communities.

Q12. Explain the concept of ‘human capital’ and how education and training facilitate its development in the context of India’s young population.

Ans: Human capital refers to the skills, knowledge, abilities, and expertise that enhance individuals’ productivity, and in India’s young population, education and training are key to unlocking its potential.  

• Concept: Human capital is the value added to labour through education and health, making workers more efficient, as seen in teachers or scientists.  
• Education: Provides foundational knowledge, e.g., civil engineering students designing bridges, preparing India’s youth for diverse careers. 
• Training: Offers practical skills, like construction site safety training, enabling hands-on application and adaptability.  
• India’s Young Population: With 65% under 35 (Economic Survey 2024), this demographic dividend can drive growth if equipped with quality education and skills.  
• Impact: Enhanced human capital boosts productivity, supports business expansion, and improves living standards, addressing literacy gaps (85% male, 70% female in 2023).