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UP Board Solutions for Class 10 Commerce Chapter 23 Labour: Meaning, Characteristics and Efficiency

Labour: Meaning, Characteristics and Efficiency Objective Type Questions (1 Mark)

Question 1.
Labour plays a very important role in:
(a) Economy
(b) Production
(c) Manufacturing
(d) None of these
Answer:
(b) Production

Question 2.
Land is a passive factor of ……..
(a) Production
(b) Assets
(c) Organisation
(d) None of these
Answer:
(a) Production

Question 3.
Physical labourer requires the maximum use of muscular strength and ……….
(a) Mentally Power
(b) Intelligency
(c) Physical Energy
(d) None of these
Answer:
(c) Physical Energy

Question 4.
Mental labour can be either professional or ……..
(a) businessmen
(b) employment
(c) administrative
(d) None of these
Answer:
(c) administrative

Question 5.
Efficiency means: (UP 2015)
(a) Human Power
(b) Mental Capacity
(c) Productive Capacity
(d) None of these
Answer:
(d) None of these

Labour: Meaning, Characteristics and Efficiency Definite Answer Type Questions (1 Mark)

Question 1.
Is production possible only with the help of labour ? Give answer in Yes or No.
Answer:
Yes.

Question 2.
If the labourers will be educated and trained the quality of labour will improve? Give answer in Yes or No.
Answer:
Yes.

Labour: Meaning, Characteristics and Efficiency Very Short Answer Type Questions (1 Mark)

Question 1.
What is the efficiency of labour?
Answer:
Efficiency means productive capacity: Efficiency of labour, therefore, denotes the capacity of the worker to produce relatively large amount or better kind of work or both in a given period of time. (UPBoardSolutions.com) The efficiency of labour is that quality of the worker by which in given conditions in a specified time be produces more or better type of goods. Hence, the efficiency of labour depends on the. quantity and quality of the product and the time is taken for its production.

Question 2.
Give any two characteristics of labour in India. (UP 2017)
Answer:
Two characteristics of labour are as follows:
(a) Labour is indispensable for production: A labourer sells his labour and not himself. In no case can we separate human effort from him.

(b) Labourers have not the same power of bargaining as these employers: Labourers are at a disadvantage in bargaining with their employers because their labour cannot be stored up and has to be sold of lower rates.

Labour: Meaning, Characteristics and Efficiency Short Answer Type Questions (4 Marks)

Question 1.
Mention three factors that increase the efficiency of labour.
Answer:
Three factors that increase the efficiency of labour are as follows:
(a) Moral Qualities: The efficiency of a worker depends upon his moral structure. Honest, sincere, industrious and sober workers work more efficiently than those who lack these qualities.

(b) Diet, health and standard of living: The healthier worker is more efficient than a diseased, malnourished poor worker. Insufficient diet, insufficient clothing, filthy living quarters, decreased efficiency. A labourer whose standard (UPBoardSolutions.com) of living is low is less efficient than the one whose standard of living is high.

(c) Education: Education is general and technical. General education enlarges the conception of a man about the matter and widens his knowledge about general things. Technical education makes a man a specialist in the work. The man who has received general and technical education is more efficient that one who lacks them.

Question 2.
Write the four disadvantages of division of labour.
Answer:
Four disadvantages of division of labour are as follows:
(a) Disadvantages to Producers:

• Disadvantages of large scale production: Big producers reduce their costs up to the limit where other competitors could not stay in the market.
• More use of Machines: Due to the more use of machines, products will bp (UPBoardSolutions.com) increases which will result in low prices.

(b) Disadvantages to Labourers:

• Disadvantages of large scale production: The use of machines reduces the importance of labour.
• Disadvantages of use of machines: Due to the implementation of division of labour, the introduction of machines also increases. Machines take the place of men which results in unemployment.

Question 3.
Make out the main differences between Land and Labour.
Answer:
Difference between Land and Labour:

Land	Labour
1. Land is a passive means of production.	1. Labour is an active means of production.
2. Land is fixed and limited in supply. It cannot be increased or decreased.	2. Supply of labour depends upon the population. It increases and decreases with the decrease or increase in population.
3. The land is not perishable which means it is not wasted.	3. Labour is perishable, it goes wasted.
4. Land lacks mobility, it cannot be shifted from one place to another.	4. Labour is mobile, it moves from places of less demand to those of more demand.
5. Land can be separated from its owner.	5. Labour is inseparable from the labourer.
6. Land is only the means, not the end.	6. Labour is both the means and the end.
7. Land is a free gift of nature.	7. Labour is a human effort.

Labour: Meaning, Characteristics and Efficiency Long Answer Type Questions (8 Marks)

Question 1.
What is meant by the term “Labour”? What are its kinds? What do you understand by skilled, semi-skilled and unskilled labour? (UP 2009, 17)
Answer:
Meaning of Labour. In simple language, “labour” means human efforts. But in Economics, labour consists of those human efforts, mental or bodily or both which are undertaken in the expectation of reward. Thus, labour includes the following two things:

• Labour can be physical as well as mental. For example, the labour of a worker is physical and that of a university lecturer mental.
• Labour is that human effort which is undertaken for the sake (UPBoardSolutions.com) of earning a wealth of a living. For example, where a man sings for his own recreation, his effort does not amount to labour. But, if he sings in expectation of a reward in a theatre, his exertion is labour.

Kinds of Labour: There are four kinds of labour found in India:

• Physical and mental labour.
• Skilled, semi-skilled and unskilled labour.
• Productive and unproductive labour.
• Professional and administrative labour.

Skilled Labour: Skilled labour is performed by those workers who have received general education and professional training for a particular trade so that they can solve complicated problem connected with their job.

Semi-skilled Labour: Semi-skilled labour is performed by those workers (UPBoardSolutions.com) who have received no formal training in the trade or job performed by them but they have acquired enough skill to solve various problems of trade by themselves.

Unskilled Labour: Unskilled labour is the labour which is performed by the worker who has obtained no training in any particular trade or line.

Question 2.
What is meant by efficiency of Labour? What factors affect the efficiency of labour?
Answer:
By ‘efficiency of labour’, we mean the productive capacity of a worker to do more work or better work or both during a specified period of time. We know that all workers are not equally efficient. It is usually observed that the labourers working in the same occupation with similar types of tools and types of equipment with the same type of raw materials, with the similar type of working conditions and for the same period of time produce not only different quantities of output but also different qualities of output.

Factors Affecting Efficiency of Labour: Efficiency of labour depends upon a large number of factors. Chief of them are as follows:
1. Racial Characters: People of some races are superior to others in physical strength (UPBoardSolutions.com) and are capable of prolonged physical exertion. Take for example the case of those living in Punjab or Haryana who are taller, stronger and hard-working than the rest of the people of the country.

2. Hereditary Characters: Hereditary traits of father and mother also influence the efficiency of the workers. For example, the children of educated parents are also usually educated and efficient.

3. Moral Qualities: An honest and sincere worker is regarded as an efficient worker. Moral quantities include the way a child is brought up, his family background, educational, religious and social upbringing etc.

4. Food, Health and Standard of Living: The efficiency of labour to a great extent is determined by the type of food eaten and the kind of physique maintained by a labourer. A large part of the labour force will go waste if a reasonable standard of living for the working class is not provided.

5. General Education: General education enables a person to develop his intellect and widen his knowledge. This knowledge makes a worker intelligent and enlarges his power to distinguish what is right and what is wrong?

6. Technical Education: Technical education trains the worker in a particular (UPBoardSolutions.com) trade or profession and develops in him certain specific qualities and makes him a specialist.

7. Climate: Extreme climatic conditions do not favour hard labour. For example, high rugged mountains and hot deserts impose tremendous handicaps upon the density of population, economic activities, transportation facilities etc. which directly influence the efficiency of labour.

8. Social Conditions: Some people are compelled to continue in the business or trade carried out by their ancestors. Under such conditions, the workers are not in a position to select their profession according to their qualification and taste. When this is the case, they cannot perform according to their efficiency.

Question 3.
What is Labour? Briefly describe the main features of labour as a factor of production. (UP 2014)
Answer:
Meaning of Labour. In simple language, “labour” means human efforts. But in Economics, labour consists of those human efforts, mental or bodily or both which are undertaken in the expectation of reward. Thus, labour includes the following two things:

• Labour can be physical as well as mental. For example, the labour of a worker is physical and that of a university lecturer mental.
• Labour is that human effort which is undertaken for the sake of earning a wealth of a living. For example, where a man sings for his own recreation, his effort does not amount to labour. But, if he sings in expectation of a reward in a theatre, his exertion is labour.

Main features of Labour as a Factor of Production
The main Features of labour as a factor of production are as follows:
1. Role in production: Labour plays a very important role in production (UPBoardSolutions.com) Land cannot produce by itself except when worked by men.

2. Active Factor: Land of its own cannot produce anything unless labour is applied to it. Capital is the produced means of production. Thus, labour alone is the main factor of production and the only active factor.

3. Developed and Undeveloped Countries: The Importance of labour in developed and developed countries is the same. Its importance in undeveloped countries is still greater because the future of these countries depends on the batter utilization of their man-powers resources.

4. Evidence of literacy and technical training: The supply of labour in a country depends not on the number of workers available but also on the quality of workers as judged from the level of literacy and the level of technical training attained by the people of the country.

Question 4.
Enumerate the characteristics of labour. What are the different kinds of labour? (UP 2019)
Answer:
Characteristics of labour: The following are the main characteristics of labour
1. Labour is indispensable for production: Production is not possible without the help of labour. Even the richest natural resources cannot produce anything without the active support of human exertion. Labour is an active factor of production. Natural resources of a country cannot produce anything without labour exerted on them.

2. Labour is inseparable from the labourer: A labourer sells his labour and not himself. In no case can we separate human effort from him.

3. Labour is perishable: Labour unsold on a particular day goes waste. If a labourer remains unemployed even for a day due to slackness of demand, strike or lockout, his labour for that day is lost to the nation. In this sense (UPBoardSolutions.com) labour is perishable. Due to this peculiarity, the bargaining power of labour is very weak and this is the reason ununited labourers are exploited by employers to accept the wages they are willing to pay. This weakness of labour is removed to some extent by unions.

4. Supply of labour changes slowly: The supply of labour for a short period can neither be contracted nor expanded to meet the decreasing or increasing demand for it. For example, if the demand for engineers goes up, it will take some five years to produce a sufficient number of trained engineers to meet the growing demand. Similarly, we cannot contract the supply of engineers if their demand falls down.

5. Supply of labour does not behave like other commodities: Ordinarily, the supply of a commodity rises, when its price rise but the supply of labour does not always rise when wages rise. For example, when wages rise beyond the standard of living of workers, they will like to enjoy more leisure and the supply of labour will be contracted even when the price of labour (i.e., wages) rises. So, supply of labour does not behave like the supply of other commodities.

6. Labour is mobile but less mobile than a capital: Labour moves from places of less demand to those of more demand. For example, thousand of labourers move from villages to metropolitan cities where their demand is more than it is in their native villages. But labour is not so mobile as capital.

A favourable investment condition in a country attracts capital even from foreign countries but better employment opportunities fail to attract a good number of efficient workers from abroad due to various difficulties of language, living, habits and social differences.

7. Labour can absorb capital: If more capital is invested in human beings and they are trained well, then labour quality will improve decidedly to a considerable extent. To train a good number of people we require large capital (UPBoardSolutions.com) in the shape of training institutions, laboratories, laboratory equipment, buildings etc. The efficiency of the labour force so raised will depend upon the type of training received. Thus, labour absorbs capital.

8. Labour produces surplus value: Generally, a labourer produces more than is required for his self-consumption. The total value of his product is much more than the wages paid to him. Hence labour produces surplus value. This surplus is kept by the employer.

9. Labour is means and ends both: Labour is meant because it is used as a means for producing wealth. It is an end in itself because production is carried on to satisfy human wants, i.e., the wants of human labourers.

10. Labourers have not the same power of bargaining as their employers: Labourers are at a disadvantage in bargaining with their employers because their labour cannot be stored up and has.to be sold at lower rates.

11. It is not easy to calculate the cost of labour: It is difficult to calculate the cost of bringing up children and the cost of training when they grow up.

12. Labourers differ inefficiency: The efficiency of all labourers is not the same. Hence, wages differ from man to man.

Kinds of Labour
Labour can be classified according to the nature of work and the professional, technical training required. The following are the most important types of labour:

1. Physical and mental labour: Physical labourer requires the maximum use of muscular strength and physical energy. The labour of the farmer, the bus driver, the mason is physical, while the labour of the teacher, the engineer, the (UPBoardSolutions.com) doctor and the barrister is mental. But the physical and mental labour sometimes cannot be separated from each other. There is no work which can be called purely mental or purely physical. The classification is based on the degree of the aspect used.

Physical labour is universally treated as inferior to the mental labour and is paid lower wages. Mental labour is considered to be of higher status and is accordingly paid higher wages. Mental labour is done by those engaged in white-collar jobs.

2. Skilled, semi-skilled and unskilled labour: The second criterion for deciding the kind of labour is the degree of skill obtained by the labourer. The labour performed by one who has obtained no training in any particular trade or line is called unskilled. He changes his occupation according to the needs of the situation. The second category is that of the workers who have received no formal training in the trade or job performed by them but who have acquired enough skill to solve various problems of the trade themselves. Their labour is called semi-skilled. Lastly, there are workers who have received general education and professional training for a particular trade so that they can solve complicated problems connected with their occupation. Their labour is called skilled.

Skilled and semi-skilled are terms which change according to time and place. The labour performed by an expert doctor, a good engineer or a great technologist is skilled but the labour of an overseer or a nurse is semi-skilled.

3. Productive or unproductive labour: So long as labour is paid for, it is productive. The labour which results in the creation of some utility is called productive; the labour which fails to do so is called unproductive. For example, the labour devoted to the writing of a book is productive if the book is published, and the writer receives a royalty for it; but if the book is not published, the (UPBoardSolutions.com) labour involved in writing is wasted. It is unproductive. Marshall says that all labour except that which fails to promote the desired aim towards which it is directed and which therefore does not produce any utilities is productive.

The older economists regarded only that labour productive which created matter. So, they regarded labour involved in agriculture and industry as productive and all other labour as unproductive. This was the view of Adam Smith. The present economists do not hold this view.

4. Professional and administrative labour: Mental labour can be either professional or administrative. The doctors, architects, professors,, lawyers etc. who are engaged in mental work perform professional labour, whereas those who run (UPBoardSolutions.com) and manage establishments and government departments are said to be performing administrative labour. Both these types are highly paid classes.

UP Board Solutions for Class 10 Commerce

UP Board Solutions for Class 10 Commerce Chapter 22 Land: Definition, Characteristics and Importance

Land: Definition, Characteristics and Importance Objective Type Questions (1 Mark)

Question 1.
The main feature of land is its:
(a) Limited Nature
(b) Unlimited Nature
(c) Waste Nature
(d) None of these
Answer:
(a) Limited Nature

Question 2.
Land is fixed in quantity and cannot be:
(a) Decreased
(b) Increased
(c) Either (a) or (b)
(d) None of these
Answer:
(b) Increased

Question 3.
Land ……….. in fertility.
(a) similar
(b) differs
(c) either (a) or (b)
(d) No
Answer:
(b) differs

Question 4.
Land is a ……….. of nature. (UP 2016, 18)
(a) Costly gift
(b) Valuable gift
(c) Free gift
(d) None of these
Answer:
(c) Free gift

Question 5.
Land is the basis of ……… development. (UP 2017)
(a) Economic
(b) Non-economic
(c) Either (a) or (b)
(d) none of these
Answer:
(a) Economic

Land: Definition, Characteristics and Importance Definite Answer Type Questions (1 Mark)

Question 1.
Can the land be shifted from one place to another? Give answers in Yes or No.
Answer:
No.

Question 2.
Is Nature known to be bountiful? Give answers in Yes or No.
Answer:
Yes.

Question 3.
In the supply of land perfectly limited? Give answers in Yes or No.
Answer:
Yes.

Land: Definition, Characteristics and Importance Very Short Answer Type Questions (2 Marks)

Question 1.
Write in short land as a free gift of nature.
Answer:
Land is given to human beings as a free gift of nature. Since land is not a produced or man-made agent. It has no cost of production and hence no supply price. Those who had acquired (UPBoardSolutions.com) land, in the beginning, had incurred their labour and capital for the purpose of increasing its productivity. Hence, they sell it to others only after realizing the capital and labour spent on it. Thus, rent or no-rent sale or purchase, the land remains as it is, and is available for the service of mankind as a free gift of nature.

Question 2.
How the land is useful in the development of primary industries?
Answer:
Agriculture, fishery, forestry, mining etc. are dependent on this gift of nature (land). Availability of fertile land and climatic conditions, forest, mines, etc. result in the establishment and development of primary industries. In addition, land also provides us a variety of agriculture products, fruits and ail other basic needs without which life is impossible on the surface of the (UPBoardSolutions.com) earth.

Question 3.
Write any four characteristics of the land as a factor of production. (UP 2019)
Answer:

1. Land is limited in supply
2. Land is permanent and is fixed
3. Land lacks mobility
4. Nature of land is passive.

Land: Definition, Characteristics and Importance Short Answer Type Questions (4 Marks)

Question 1.
How can you say that land is limited in supply?
Answer:
The land is strictly limited in quantity i.e., its supply cannot be increased or decreased like the other factors of production. Though human beings have achieved scientific progress and their achievements have touched each and every aspect of human activity, his power to add to the area of land is almost negligible. In the same way, the minerals could be mind, but only what is available in underground deposits We are also blessed with sun, moon rains etc.

Mankind can only enjoy it as and when it is given to him. For instance on agriculturist may require more rains for his crop, but he must be content with what reaches him by natural process. In this regard some way argue that land surface can increase on account of the operation of some forces of nature, which result in an increase in the quantity of the land already in existence.

Question 2.
Give any two importances of Land in Production.
Answer:
Importance of Land in production:
(a) Helps in moulding life of the people: Land play a decisive role in moulding the life of human beings and helps him to choose an occupation. It facilitates freedom of movement of human beings. He is free to move within (UPBoardSolutions.com) the territory of his country. International movement of labour based on laws governing such movements thus has enabled them to select different occupations, thereby helping to improve their standard of living. Without land, this would not have been possible.

(b) Supply of Food and Fodder: Land as nature provide food of all kinds to human beings. Land (forest) besides supporting wild animals also fodder for cattle. Thus land is the basis of all kinds of life whether human or animal.

Land: Definition, Characteristics and Importance Long Answer Type Question (8 Marks)

Question 1.
What is land? Describe the characteristics of land. (UP 2008)
Or
Give the definition of land. Write its characteristics. (UP 2013)
Answer:
In common parlance, land refers to the solid part of the earth. But in Economics, land is not used only in the sense of natural resource. Land means all nature, living and non-living, which is used by man in production. Within the concept of land are included all the free gifts of nature or natural resources above the earth and below the surface of the earth, which help in the production of economic resources. No production is possible without the help of land.

According to Prof. A. Marshall, “By land is meant not merely land in the strict sense of the word, but the whole of the materials and forces which nature gives freely for man’s aid in land and water, in air and light and heat.”

According to Prof. J. K. Mehta, “Land is specific or that it is the specific (UPBoardSolutions.com) element in a factor or again that it is the specific aspect of a thing.”

Peculiarities or Characteristics of Land. Land as one of the factors of production possesses certain peculiarities or characteristics which are as follow:

1. A Free Gift of Nature: Land is freely gifted by nature. As land is not produced or man-made agent, it has no cost of production and hence no supply prices. Thus, rent, or no rent sale or purchase, the land remains as it is and is available for the service of mankind as a free gift of nature.

2. Land is Limited in Supply: Land is strictly limited in quantity i.e., its supply cannot be increased or decreased like the other factors to production. Though human beings have achieved
scientific progress and their achievements have touched each and every aspect of human activity, his power to add to the area of land is almost negligible.

3. Land is Permanent and is Fixed: Land is permanent and is fixed, hence it cannot by destroyed. Lands which are destroyed in a war, havoc caused by an atom bomber by any natural calamity like earthquakes, volcanic eruptions, floods etc. too regain productivity after some time.

4. Land Lacks Mobility: Land cannot be shifted from one place to another. Only its products can be transported from one place to another. Thus, unlike other factors of productions, land lacks mobility. But in Economics, mobility does not imply place mobility, it implies use mobility. The black soil (Land) suitable for cotton cultivation cannot be shifted to Uttar Pradesh from (UPBoardSolutions.com) Maharashtra. Therefore, land lacks place mobility. But an agricultural land can be converted into a site for factory, hence it possesses use mobility.

5. Land is of Different Variety: Land shows variability in its composition and productivity. Just like man are not alike, the pieces of land are also not alike. All lands are not alike, i.e., some land is fertile, while others are infertile.

6. Passive Nature of Land: Land does not produce the wealth of their own, but human beings spend capital and labour on land thereby producing things of their needs and acquiring wealth. Land can be used for the productive purpose with the able support of labour and capital. Even then we can consider land only as a passive agent of production. Land can be made active by human beings and this nature of passivity of land also constitutes its characteristics.

7. Relativity of Situation: Situation of land is of great importance in deciding the prices of a piece of land. Land in a city fetches more value than a piece of land in a village land suitable for cultivation, the price (UPBoardSolutions.com) of which varies with that of infertile or wastelands. Same is the case with a land situated in a remote corner of a country, away from human inhabitation, markets etc.

8. Most Important Factor of Production: Land is the most important factor of production. Without land, nothing can be produced. Even the very existence of human beings is because of the existence of land. If the land had not been there, the universe would have been avoided.

UP Board Solutions for Class 10 Commerce

UP Board Solutions for Class 10 Commerce Chapter 20 Expenditure and Saving

Expenditure and Saving Objective Type Questions (1 Mark)

Question 1.
Income is utilized in:
(a) Expenditure
(b) Saving
(c) Either (a) or (b)
(d) Both (a) or (b)
Answer:
(d) Both (a) or (b)

Question 2.
The expenditure has been classified into:
(a) Individual Expenditure
(b) Social Expenditure
(c) Neither (a) or (b)
(d) Both (a) or (b)
Answer:
(d) Both (a) or (b)

Question 3.
Social Expenditure are of obligatory expenditure and ……….
(a) Individual Expenditure
(b) Consumption Expenditure
(c) Optional Expenditure
(d) None of these
Answer:
(c) Optional Expenditure

Question 4.
Saving is defined as the excess of income over ………
(a) Consumption Expenditure
(b) Production Expenditure
(c) Optional Expenditure
(d) Individual Expenditure
Answer:
(a) Consumption Expenditure

Question 5.
When a person incures some expenditure for the benefit of the society, such expenditure is known as ………..
(a) Individual Expenditure
(b) Social Expenditure
(c) Consumption Expenditure
(d) Optional Expenditure
Answer:
(b) Social Expenditure

Expenditure and Saving Definite Answer Type Questions (1 Mark)

Question 1.
Write the type of Income.
Answer:
(i) Monthly Income
(ii) Real Income.

Question 2.
Write the types of social expenditure.
Answer:
(i) Obligatory Expenditure and
(ii) Optional Expenditure.

Question 3.
What is its called when money received by a person in return of this work services or utilizing his property for any production purpose.
Answer:
Income.

Expenditure and Saving Very Short Answer Type Questions (2 Marks)

Question 1.
Define Expenditure.
Answer:
Expenditure is the way by which man meets (UPBoardSolutions.com) out his necessities. In other words, Expenditure is that portion of the income with which human being derive present day satisfaction.

Question 2.
How saving is disadvantageous to society as a whole?
Answer:
Disadvantages to society as a whole are as follows:
(a) Rise of class conflicts: Savings which far exceed the limits will ultimately result in class-conflicts. Huge savings on the part of the monopolists put them at an advantageous position and they, therefore, exploit the weaker sections of the society.

(b) Fear of over-production and Unemployment: Savings help in the formation of capital, and the use of capital give rise to further production. Increased production still further increases capital formation. This tendency, therefore, leads to overproduction.

Question 3.
How the saving is disadvantageous to an individual?
Answer:
Disadvantages to an individual ate as follows:
(a) Psychological effect: Postponement of present wants for future gains involve an element of sacrifice on the part of an individual. Consumption, whether it is useful or wasteful, has to be set aside in order (UPBoardSolutions.com) to make savings. A person needs to tighten on his belt to save an amount which he thinks may help to enjoy at a later stage. But how many persons are really able to enjoy this?

(b) Chance of Exploitation: To a mss wealth in order to keep it for future purpose can give rise to exploitation. In addition, if a person gives undue emphasis to savings, he may even resort to evil and undesirable methods in order to attain wealth.

(c) Create a group of Spendthrift and Lazy Persons: These persons who are lucky to get savings from their parents for the creation of which they have not put any effort, fail to understand the need to utilize the savings for productive purposes.

Question 4.
Point out the difference between expense and saving. (UP 2019)
Answer:

	Expenses	Savings
1. Meaning	Expenses in that portion of income with which human beings derived present-day satisfaction.	Saving is the part of income which is set aside in a productive manner in order to meet out some future requirements.
2. Effect	In the case of expenditure, the goods and services are applied directly to the satisfaction of wants.	In the case of saving the goods and services are applied to the production of other wealth.

Expenditure and Saving Short Answer Type Questions (4 Marks)

Question 1.
What are the points of difference between saving and expenditure?
Answer:
Difference between Savings and Expenditure: Savings and expenditure can be distinguished in the following way:
(a) Savings help a person to satisfy his future wants, while expenditure satisfies his present requirements.

(b) In the case of savings goods and services are applied indirectly to the satisfaction of wants, while in the case of expensive goods and services are applied directly to the satisfaction of wants.

(c) Capital is formed out of the savings of the people and, therefore, (UPBoardSolutions.com) saving constitutes the most important aspect of capital accumulation; whereas expenditure does not help in the creation of capital.

(d) Savings increase the income of a person whereas expenditure decreases the income of a person.

(e) A wise and farsighted person saves something from his current income which constitutes saving, while a person who looks wisdom of farsightedness utilises his whole income on expenditure.

Question 2.
Discuss the importance of savings from the point of view of the nation.
Answer:
Importance of Savings to the country can be studied under the following heads:
(a) To raise capital formation: Large scale production of modern times is possible only with the help of huge capital. Savings of the people help the country to accumulate capital. In other words, capital is the result of the (UPBoardSolutions.com) savings of the people.

(b) To raise the standard of living of the People: Standard of living of the people depends upon the rate of economic development achieved by a particular country. Rapid economic growth enables its citizens to enjoy the high standard of living.

(c) To Increase Employment Opportunities: Mechanization, large scale production, division of labour and all-round development of the country will create more and better employment opportunities to the people in a country. This is possible only if people are in the habit of saving and moreover are capable to save.

(d) To achieve military power: Savings help a country to achieve military power. The strength of the armed forces to safeguard its boundaries and to wage successful battles bring glory to this nation. Savings, therefore, are of grant importance to increase the might of the forces in a particular country.

Expenditure and Saving Long Answer Type Questions (8 Marks)

Question 1.
What do you understand by expenditure and saving? Discuss the objectives and social importance of saving. (UP 2009, 18, 15)
Or
Describe the importance of saving in society. (UP 2018)
Answer:
Expenditure: Expenditure is that portion of the income with which human beings derive present day satisfaction. In other words, expenditure is the way by which man meets out his necessities.
Savings: Saving is that part of income which is not spent by an individual for satisfying his present-day necessities but is kept aside for meeting out uncertainties and crisis in future.
Objectives of Savings: Following are some reasons behind savings:

1. To Create Capital: Savings are made for the purpose of creating capital to earn more income in future.

2. To Meet Out the Calamities: Sometimes a man has to face a critical situation in which he has to spend more than his income. In that case, his savings cover the gap between income and expenditure.

3. Provision for Old Age: In old age, the earning capacity of a person (UPBoardSolutions.com) decreases and he needs more money. So savings are made to provide for old age.

Importance of Savings: Following are some importance of saving:

1. To Raise capital-formation: Large scale production of modern times is possible only with the help of huge capital. Savings of the people help the country to accumulate capital. In other words, capital is the result of the savings of the people.

2. To Raise the Standard of Living of the People: Standard Pf living of the people depends upon the rate of economic development achieved by a particular country. Repaid economic growth enables its citizens to enjoy the high standard of living. A country whose people do not have the capacity to save will have only a low per capita income. Higher the per capita income, higher the standard of living of the people.

3. To Increase Employment Opportunities: Mechanization, large scale production, division of labour and all-round development of the country will create more and better employment opportunities to the people in a country. This is possible only if people are in the habit of savings.

Question 2.
What is the relationship between expenditure and savings?
Answer:
Relationship between Expenditure and Savings: Expenditure and Income result in the increase of production. They increase the economic developments and helps in the upliftment of the nation’s status because both satisfy the various requirements of a human being. The only difference is that savings help a person to satisfy his future wants, while expenditure satisfies his present requirements.

Economists are having two different views in this connection according to one group of economists, “Expenditure is one of the best means for society’s welfare.” On the other hand, other economists suggest that “Savings is the only cause of society’s welfare.”

Those who are of the opinion that savings are more important than the expenditure argue the same because of the following reasons:

1. Savings lead to the capital formation which helps in the production (UPBoardSolutions.com) of further wealth. Accumulation of capital increase production in leaps and bounds boosts trade and commerce and earns huge profits for government and industrialists, which induce them to start more productive units.

2. The workers will enjoy more and better employment opportunities. Hence, a nation whose people give more importance to savings than expenditure enable them to achieve economic development.

3. The national income and per capita income of the people will also simultaneously increase owing to increased savings.
The other group of economists which favour expenditure says that the amount spent by the people will proportionately increase the demand for commodities in the market. With increased demand, industrialists will be induced for increasing production. They will set up new units for earning more profits resulting in better employment opportunities with more wages. The material prosperity of the country will have its far-reaching effect in all walks of human activities. People can increase their income and reuse their standard of living.

From the above study, it can be concluded that for the economic development of a country both savings and expenditure are equally important and the country cannot achieve material prosperity without their co-ordinated functioning. Hence, savings and expenditure are like the two tracks on which a nation progresses.

Question 3.
Give the main points of difference between Saving and Expenditure.
Answer:
Savings and expenditure can be distinguished in the following way:
1. Savings help a person to satisfy his future wants, while expenditure satisfies his present requirements.

2. In the case of savings, goods and services are applied indirectly to the satisfaction of wants, while in the case of expenditure, goods and services are applied directly to the satisfaction of wants.

3. Capital is formed out of the savings of the people and, therefore, savings constitute the most important aspect of capital accumulation; whereas expenditure does not help in the creation of capital.

4. Savings increase the income of a person whereas expenditure decreases the income of a person.

5. A wise and farsighted person saves sometimes from his current (UPBoardSolutions.com) income which constitutes savings, while a person who lacks wisdom and farsightedness utilizes his whole income on consumption.

UP Board Solutions for Class 10 Commerce

UP Board Solutions for Class 10 Commerce Chapter 19 Law of Diminishing Marginal Utility

Law of Diminishing Marginal Utility Objective Type Questions (1 Mark)

Question 1.
The law of diminishing marginal utility regulates our daily:
(a) Income
(b) Production
(c) Expenditure
(d) Saving
Answer:
(c) Expenditure

Question 2.
When the total utility is maximum marginal utility is:
(a) Zero
(b) Less than one
(c) More than one
(d) None of these
Answer:
(a) Zero

Question 3.
The more we have of a thing, the ………… we want to have of it.
(a) Less
(b) More
(c) Either (a) or (b)
(d) None of these
Answer:
(a) Less

Question 4.
The law of diminishing marginal utility ………. in the case of rare collections.
(a) Apply
(b) Does not apply
(c) either (a) or (b)
(d) None of these
Answer:
(b) Does not apply

Question 5.
If the period of consumptions is not the ……….. law of diminishing marginal utility does not operate.
(a) Stop
(b) Never end
(c) Continuous
(d) None of these
Answer:
(c) Continuous

Law of Diminishing Marginal Utility Definite Answer Type Questions (1 Mark)

Question 1.
What are human wants?
Answer:
Unlimited.

Question 2.
Write the direction of Marginal Utility Curve.
Answer:
The curve slopes downwards (UPBoardSolutions.com) to the right.

Law of Diminishing Marginal Utility Very Short Answer Type Questions (2 Marks)

Question 1.
State any two assumptions of law of diminishing marginal utility.
Answer:
Two assumptions of law of diminishing marginal utility are as follows:
(a) Change in other person’s stock: The law of diminishing marginal utility does not hold if there occurs a change in other people’s stock. According to the law, marginal utility diminishes when there is an increase in our (UPBoardSolutions.com) stock. But it is pointed out that in some cases the utility changes not because of a change in our stock, but because of a change iri other people’s stock.

(b) Suitable Time: In order to make the law applicable, the commodity should be consumed within a certain time otherwise, the law will not operate.

Question 2.
Write a brief note on the importance of the law of diminishing marginal utility.
Answer:
The importance of the law can be explained as under:
(a) Indicates relation between the standard of living and efficiency: (UPBoardSolutions.com) The law of diminishing marginal utility helps us to understand the reason for a fall in the efficiency owing to a rise in the standard of living of the people.

(b) Theory of Taxation and Public Expenditure: Prof. Marshall utilised the law of diminishing marginal utility to build up his theory of taxation and public expenditure.

(c) Importance in the Field of Exchange: The law of diminishing marginal utility has its own importance in the field of exchange also. When the supply of any commodity increases its marginal utility decreases and the prices also come down. The commodities which are supplied largely have no value-in-exchange. Thus, the law has considerable importance in the field of exchange.

(d) Basis of Consumer’s Surplus: The utility derived by a consumer from each (UPBoardSolutions.com) successive unit of a commodity goes on diminishing, though the price of the article remains unchanged. He stops his purchase and that point where the utility derived equals utility lost. Thus, the law of diminishing margined utility is the basis of the concept of consumer’s surplus.

UP Board Solutions for Class 10 Commerce

UP Board Solutions for Class 10 Commerce Chapter 18 Utility, Marginal Utility, Total Utility

Utility, Marginal Utility, Total Utility Objective Type Questions (1 Mark)

Question 1.
Marginal Utility may be:
(a) Positive
(b) Negative
(c) Zero
(d) All of these
Answer:
(d) All of these

Question 2.
When the consumption of marginal unit gives neither satisfaction nor dissatisfaction, the marginal utility is:
(a) Positive
(b) Negative
(c) Zero
(d) All of these
Answer:
(c) Zero

Question 3.
Marginal utility ………….. with successive units of consumption.
(a) Increases
(b) Decreases
(c) Either (a) or (b)
(d) None of these
Answer:
(b) Decreases

Question 4.
Marginal utility is the ………… associated with the consumption of successive units.
(a) Sum of Marginal Utility
(b) Sumof Total Utility
(c) Neither (a) or (b)
(d) None of these
Answer:
(a) Sum of Marginal Utility

Question 5.
When marginal utility diministes with successive units of consumption, the total utility at first increases at a ………. rate.
(a) Increasing
(b) Diminishing
(c) Decreasing
(d) None of these
Answer:
(b) Diminishing

Utility, Marginal Utility, Total Utility Definite Answer Type Questions (1 Mark)

Question 1.
Who says that “the additional benefit which a person derives from a given increase of his stock of a thing diminishes with every increase in the stock that he already has.”
Answer:
Prof. Marshall.

Question 2.
What marginal is said when the consumption of the last unit gives some satisfaction?
Answer:
Positive.

Utility, Marginal Utility, Total Utility Very Short Answer Type Questions (2 Marks)

Question 1.
Define Utility.
Answer:
In common language, the word ‘utility’ means usefulness but in economics, it is used for the propriety in a commodity to satisfy human wants. According to Baugh, “Utility is (UPBoardSolutions.com) the capacity to satisfy human wants.”

Question 2.
Write two characteristics of utility.
Answer:
The characteristics of the utility are as follows:

• Utility is created by Wants: Utility in any commodity is created by an effective desire to possess it. If a thing is not wanted, it has no utility.
• Utility is an abstract quality: Utility is (UPBoardSolutions.com) a commodity can only be experienced. It is a psychological characteristic. It cannot be seen or touched physically.

Question 3.
What are the two kinds of utility? (UP 2016)
Answer:
Utility is of two kinds:

• Marginal Utility
• Total Utility.

Utility, Marginal Utility, Total Utility Short Answer Type Questions (4 Marks)

Question 1.
What is the total utility?
Answer:
Total Utility: The total utility from the consumption of an article is the sum of utilities of all units consumed at a particular time to satisfy a particular want. Prof. A. L. Meyers defines it as, “the sum of (UPBoardSolutions.com) the marginal utility associated with the consumption of the successive units.” Prof. Marshall says that “the total utility or the total pleasure or another benefit it yields him increases but does not increase at the same route as his stock increases.”

Question 2.
How marginal utility and total utility-related?
Answer:
The relation between the total utility and marginal utility is deep. The total utility increases so long as the marginal utility is positive. The total utility is maximum when the marginal utility is zero. After this point, the total (UPBoardSolutions.com) utility begins to decrease and marginal utility is negative.

Question 3.
Distinguish between marginal utility and total utility. (UP 2019)
Answer:

	Total Utility	Marginal Utility
1. Meaning	Total utility means total benefits obtained by a person from the consumption of goods and services.	Marginal utility means the amount of utility a person gains from the consumption of each successive unit of a commodity.
2. Result	Suffers from diminishing returns.	Declines for each additional unit consumed.

Utility, Marginal Utility, Total Utility Long Answer Type Questions (8 Marks)

Question 1.
What do you mean by the total utility and marginal utility? Explain with the help of example and diagram. (UP 2008, 09)
Or
What do you understand by the term Total Utility and Marginal Utility? What are the kinds of Marginal Utility?
Answer:
Total Utility: Total Utility is the sum of the utility derived from the (UPBoardSolutions.com) consumption of all the units of a commodity at the disposal of the consumer at a particular time.

Marginal Utility: Marginal utility is the utility of the last unit of the commodity that is consumed at any particular time. In order to satisfy our wants, we have to consume a number of units of a commodity. For instance, a person consumes 2 bananas yielding 6 and 4 units of utility at a time, the marginal utility is the utility of second banana which is equal to 4. Now, further suppose that he takes one more banana yielding him utility, say 2 units, then in such a case third banana is the marginal unit and its marginal utility will be equal to 2.

The marginal utility may be of three kinds i.e., (i) positive, (ii) negative, and (iii) zero.

• Marginal utility is positive when the consumption of the last unit gives some satisfaction.
• Marginal utility is negative when the consumption of marginal unit gives some dissatisfaction or does not yield any utility.
• Marginal utility is zero when consumption neither provides (UPBoardSolutions.com) satisfaction nor causes any dissatisfaction.

Relationship between marginal and total utility

Units of Chapatis consumed in succession	Marginal Utility	Remarks	Units of Total Utility
1	40	Positive Marginal Utility	40
2	30		70
3	20		90
4	10
5	0	Zero Marginal Utility	100
6	-10	Negative Marginal Utility	100
7	-20		70

Marginal utility of a commodity to a person is based on two things. These two things are as follows :

• Consumption should be regular and unbroken.
• The utility in question should be the utility of the final unit (or marginal unit) consumed.

For example, if an individual takes only 3 units of chapatis and his hunger is satisfied then the marginal unit is the third one and the marginal utility is the utility derived from its consumption, i.e., 20 units as shown in the table.

The relation between the total utility and marginal utility is deep. The total utility increases so long as the marginal utility is positive. The total utility is maximum when the marginal utility is zero. After this point, the (UPBoardSolutions.com) total utility begins to decrease and marginal utility is negative. This relationship between total and marginal utility is well explained through the following figure:
It can be exhibited with the help of the diagram given in figure.

Question 2.
List the importance of Law of Diminishing Marginal Utility. (UP 2009)
Answer:
The law of diminishing marginal utility is considered as one of the basic laws of Economics.
The importance of the law can be explained as under:
1. Basis of the Law of Demand: The law of diminishing marginal utility provides the function for various laws of consumption. The law of demand which is a very important law of consumption is based on the law of diminishing marginal utility.

2. Basis of Equi-marginal Utility: The law of equity-marginal utility or the law of substitution is derived from the law of diminishing marginal utility. A consumer does not spend his total income on the purchase of one (UPBoardSolutions.com) commodity alone, instead, he spends it on different commodities in such a manner as to ensure that the marginal utility obtained from every commodity purchased is in the same relationship to price.

3. Basis of Consumer’s Surplus: The utility derived by a consumer from each successive unit of a commodity goes on diminishing, though the price of the article remains unchanged. He stops his purchase at that point where the utility derived equals utility lost. Thus, the law of diminishing marginal utility is the basis of the concept of consumer’s surplus.

4. Indicates Relation between Standard of Living and Efficiency: The law of diminishing marginal utility helps us to understand the reason for a fall in the efficiency owing to a rise in the standard of living of the people.

5. Importance in the Field of Production: The law of substitution is based on the law of diminishing marginal utility. Accordingly, the factors of production can be substituted. The process of substitution is influenced by the prevailing prices of the factor of production. The dearer factors will be substituted by cheaper factors. The law of diminishing marginal utility will prove helpful to understand the law of substitution.

6. Theory of Taxation and Public Expenditure: Prof. Marshall utilized the law of diminishing marginal utility to build up his theory of taxation and public expenditure.

7. Public Finance: Modern governments follow the system of taxation so as to transfer the purchasing power from the richer sections of the society to the poorer section. This will help to achieve greater economic equity among the various sections of the society. Taxation and public expenditure is undertaken by the government are based on the law of diminishing marginal utility.

8. Importance in the Field of Exchange: When the supply of any commodity (UPBoardSolutions.com) increases, its marginal utility decreases and the prices also come down. The commodities which are supplied largely have no value-in-exchange. Thus, the law has considerable importance in the field of exchange.

Question 3.
What are the assumptions of Law of Diminishing Marginal Utility? (UP 2009)
Answer:
The law of diminishing marginal utility is based on certain assumptions and any change in the assumptions would obstruct the operation of the Law. ‘Other things remaining the same’ signifies certain assumptions and conditions without which the law cannot operate. The law of diminishing marginal utility is based on the following important conditions or assumptions:

1. The Units of the Commodity must be Homogeneous: The first condition to be satisfied for the operation of the law is that units of the commodity must be similar in quality and quantity. Suppose, you give two oranges to (UPBoardSolutions.com) a hungry man to appease his hunger. The first orange which you gave him is a slightly damaged one while the second orange is a better one. Naturally, when the first orange was not tasty, he will derive more satisfaction from the second orange.

Suppose, you give a third orange also, that would be the best of the three oranges; he may even derive more utility from its consumption than the other two oranges. If the units of the commodity are not similar in quality, the law of diminishing marginal utility will not operate. Similarly, the quantity of each unit must remain the same. If the first orange is very small in size while the second orange is double the size of the first orange, the law of diminishing marginal utility does not operate. Thus, if the units of the commodity are not alike in quality and size, the law may not operate.

2. The Process of Consumption should be Continuous: The second condition is that the period of consumption should be continuous and there should not arise any time-gap between consumption of the two units of the commodity. For example, (UPBoardSolutions.com) a person eats one chapati at 8 O’clock in the morning, the second chapati at 9 O’clock in the morning and the third chapati at 10 a.m. The law of diminishing marginal utility does not apply here because the period over which consumption is spread is not continuous and sufficient time interval given will obstruct the operation of the law. If the second chapati is taken immediately after the first chapati, the utility of the later will diminish.

3. The Price of the Commodity and its Substitutes should Remain the Same:
The price of the commodity should remain unchanged during the process of consumption. For instance, if the price of an article has reduced considerably consumers may want it with increased intensity and the desire to get more and more of that article will increase its utility. Therefore, the law of diminishing marginal utility will not operate as far as the commodity in question becomes cheap and one wants it with increased intensity.

The price of the substitutes should also remain the same for the operation of the law. If the cost of an article comes down, the demand for it will increase and it is natural to increase its utility also. If the price of the substitute of an article goes up, people start consuming the article in question and the utility of the article goes up, comparatively to that of the substitute. Thus, the (UPBoardSolutions.com) unchangeableness of the price of the article in question and the substitute thereof is very important for the operation of the law of diminishing marginal utility.

4. Taste, Habit, Fashion and Income of the Consumer should remain Unchanged: The law of diminishing marginal utility operates only if the taste, habit and income of the consumer do not change, in those cases where the period of consumption is long. For example, the particular design of a shirt which is not in fashion may yield only less utility to a person, but if the same shirt comes in fashion, its utility is liable to increase.

5. Mental Approach: The mental outlook of the consumer should remain the same. Normally, a person who eats 5 chapatis should feel satisfied, and if he is forced to eat more, he will yield zero utility and later on negative utility. Suppose, he takes some intoxicants after eating 5 chapatis, he craves for more chapatis and subsequently its utility will increase rather than diminishing. Under such a situation the law does not work.

Question 4.
Explain the Law of Diminishing Marginal Utility in detail. (UP 2008)
Or
Explain the Law of Diminishing Marginal Utility with the help of a diagram. (UP 2011, 13)
Answer:
Law of Diminishing Marginal Utility: Law of Diminishing Marginal Utility states that as a person purchases more and more units of a commodity, its marginal utility diminishes. The more we have of a commodity, the less urgently we want its subsequent units and the utility of its succeeding units goes on diminishing. According to Prof. Marshall, “The additional benefit which a person derives from a given increase of the stock of a thing diminishes with every increase in the stock, which he already has.” This concept can be cleared from the following example:

A person who is hungry starts eating bread to satisfy his hunger. Suppose that he consumes 5 pieces of bread. The utility of the first bread will be great. The utility of second bread will not give him the same amount of utility as the first bread has already satisfied a part of his hunger. The second bread yields less satisfaction in comparison to the first bread. The third bread (UPBoardSolutions.com) will yield even less utility than the second bread. The satisfaction of the fourth bread will be less than that of the third and of the fifth will be less than that of the fourth. This way, the utility of each bread will go on diminishing with every successive bread. Ultimately he would reach a stage where his hunger is fully satisfied and the utility of next bread would come down to zero. If he is forced to take more, he will derive ‘negative utility’ or ‘disutility’.

This example makes it clear that as a person gets more and more units of a commodity, the marginal utility derived from the successive units diminishes.

Tabular Representation: The following table illustrates the Law of Diminishing Marginal Utility as applied to the consumption of slices of bread:

Units (Slices of bread)	Marginal Utility (Units of satisfaction)	Total Utility
1	25	25
2	23	48
3	19	67
4	15	82
5	10	92
6	0	92
7	-12	80
8	-20	60

Marginal utility of bread till the 5th unit is positive if the consumer proceeds further to consume the 6th unit, marginal unit drops down to zero. After the zero points, utility becomes negative i.e., the 7th and 8th units give negative utility.
Diagrammatic Representation: The Law of Diminishing Marginal Utility can (UPBoardSolutions.com) be represented diagrammatically. The above illustration can be better understood with the help of the following diagram:

Along the OX-axis units of the commodity is represented and along the OY-axis marginal utility is measured. ‘MU’ is the marginal utility curve. This curve slopes downwards to the right because with every additional increase in the quantity of the commodity consumed, there is a decline in the marginal utility. At the 6th unit, the marginal utility drops down to zero. ‘P’ is (UPBoardSolutions.com) the point of satiety, and then it becomes negative. The dotted area below the OX-axis represents negative utility.

UP Board Solutions for Class 10 Commerce