CBSE Class 9 Social Science Chapter 08 Building Blocks In Economics The Problem Of Choice MCQs Set 01

Answer: (B) People have unlimited wants but resources are finite

Explanation:
The chapter establishes that the fundamental economic problem arises from the mismatch between unlimited human wants and limited available resources, making choice inevitable.

Answer: (A) 20 kg of wheat

Explanation:
At combination B, wheat production is 90 kg; at combination C, it is 70 kg. Therefore, growing more barley (from 25 to 50 kg) requires sacrificing 20 kg of wheat.

Answer: (C) The benefit or value foregone when choosing one alternative over another

Explanation:
Opportunity cost, as explained in the chapter, refers specifically to the value of what is given up when one alternative is chosen instead of another.

Answer: (B) Needs are essentials like food and shelter, while wants are preferences like gadgets and vacations

Explanation:
The chapter clearly defines needs as essentials such as food, water, and shelter, whereas wants are desires for items like gadgets, vacations, or luxury products that people may want to upgrade over time.

Answer: (B) Advising investors on where to invest and studying economic trends

Explanation:
The chapter identifies finance and research and education as important areas where economists work, which include advising investors and studying economic trends.

Answer: (C) A central planning authority of the government

Explanation:
The chapter states that in a planned economy, a central planning authority such as the planning commission makes all major economic decisions about what and how much will be produced and at what prices.

Answer: (B) Government ownership of resources with limited competition removes incentive for enterprises to improve quality or innovate

Explanation:
• Limited competition restricted by government regulations
• Little motivation for enterprises when they follow central targets rather than competing for customers
• Result is minimal incentive to improve quality or introduce innovations

Answer: (B) Producers analyze consumer preferences, income levels, and demand before deciding which groups to serve

Explanation:
The chapter illustrates through the shoe example that producers analyze what consumers like, their purchasing power, and demand levels before deciding which group of consumers to serve, such as students, professionals, or athletes.

Answer: (B) It illustrates the trade-off between two goods; producing more of one requires producing less of the other

Explanation:
As the farmer moves along the PPC from point A to E, producing more barley means producing less wheat, showing the inverse relationship created by limited resources.

Answer: (B) Mainly through forces of demand and supply with minimal government intervention

Explanation:
The chapter explains that in a market economy, questions of what, how, and how much to produce are addressed mainly by demand and supply forces with little government intervention, whereas the government acts more like a referee ensuring safety and order.

Answer: (B) It derives from Greek words oikos (household) and nemein (management)

Explanation:
The chapter traces economics to the Greek word oikonomia, composed of oikos meaning 'household' and nemein meaning 'management', so economics fundamentally refers to household management.

Answer: (B) It shifted toward a more market-oriented system while the government retained an important regulatory role

Explanation:
• Government introduced reforms reducing excessive regulations
• Encouraged private enterprise and opened economy to global trade
• Shifted toward market orientation while government maintained important role
• Result was gradual transition to a more mixed economy model

Answer: (B) Mixed economy

Explanation:
The chapter defines a mixed economy as one combining features of both market and planned economies, where private individuals, enterprises, and government all play important roles in making economic choices.

Answer: (B) Factors include cost of capital, technology available, nature of the product, availability and cost of labour, and government laws and regulations

Explanation:
The garment manufacturing example in the chapter demonstrates that the choice between labour-intensive and capital-intensive methods depends on machine costs, available technology level, product nature, labour availability and costs, and government policies.

Answer: (B) They are available to all individuals without anyone being excluded, and one person's use does not prevent others from using them

Explanation:
The chapter defines public goods as goods and services available to all without exclusion, such as parks, roads, police services, street lights, and basic education, where simultaneous use by multiple people is possible.

Answer: (B) Because good decisions rely on data and analysis rather than guesswork, helping identify opportunities and risks

Explanation:
The chapter emphasizes that economists study alternatives, opportunity costs, and potential outcomes using data from government reports and financial statements to help individuals and institutions make informed decisions rather than rely on guesswork.

Answer: (B) Opportunity cost

Explanation:
The chapter defines this concept as the value of what is given up when one alternative is chosen over another. In this farming scenario, by selecting barley, the farmer sacrifices potential wheat production, making the lost wheat the opportunity cost of the barley decision.

Answer: (B) A need is essential for survival like food or shelter, while a want is a preference like gadgets or vacations

Explanation:
The chapter explicitly states that needs are essentials such as food, water, and shelter, whereas wants are preferences like gadgets, vacations, or luxury items. Human wants are noted to be unlimited and keep changing, whereas needs are more fundamental to survival.

Answer: (B) 40 kg

Explanation:
At point D, the farmer produces 40 kg of wheat. At point E, wheat production falls to 0 kg. The difference between these two quantities is 40 kg, which represents the amount of wheat that must be sacrificed to increase barley production from 75 kg to 100 kg.

Answer: (B) Coal and water

Explanation:
The chapter distinguishes between natural resources like water and coal, and human-made resources like capital and technology. Coal and water are specifically cited as examples of resources that exist in nature and are limited in supply.

Answer: (B) To decide what, how much, and how will be produced, along with who receives the goods

Explanation:
• The central planning authority makes all major economic decisions
• It determines what and how much will be produced
• It decides how goods will be produced and who will receive them
• It also sets prices for goods and services
In contrast to market economies where these decisions are driven by demand and supply, planned economies rely on government control through such central authorities.

Answer: (B) Market economies rely on demand and supply forces with minimal government intervention, while planned economies depend on government central planning

Explanation:
The chapter contrasts these systems clearly: in market economies, questions of what and how much to produce are answered by demand and supply with little government control, whereas in planned economies a central authority makes all these decisions. Market economies allow private ownership and competition, while planned economies involve heavy government regulation and control.

Answer: (B) Machines are expensive and labour is cheap and readily available

Explanation:
The chapter explains that the choice between labour-intensive and capital-intensive production depends on the cost of capital and availability of labour. If machines are expensive, firms will rely more on workers; if machines become affordable, they shift to automation. Additionally, when labour is cheap and easily available, labour-intensive methods are preferred.

Answer: (B) They study alternative options, opportunity costs, and potential outcomes using data to guide decision-making

Explanation:
Economists examine available alternatives, associated opportunity costs, and potential outcomes to assist individuals, enterprises, and institutions in making decisions. They use data from government reports, economic surveys, and company financial statements to understand risks and opportunities. This analysis spans four main areas: policymaking, business consulting, finance, and research and education.

Answer: (B) India moved from a state-led approach toward a more market-oriented system while retaining government's important role

Explanation:
The chapter's 'Don't Miss Out' section explains that India evolved from a post-Independence state-led approach similar to a planned economy into a mixed economy after 1991 reforms. These reforms reduced excessive regulations, encouraged private enterprise, and opened the economy to global trade, gradually shifting India toward a market-oriented system while the government maintained a significant regulatory role. This transformation made India a mixed economy rather than purely planned or purely market-based.