Maharashtra Board Class 9 Geography Chapter 8 Introduction to Economics PDF Download

8. Introduction to Economics

Suppose this is your expenditure this month and your monthly income is ₹ 20000. To strike a balance between your income and your expenditure, decide what will be your preferences for expenditure.

Rewrite the table according to your preferences and discuss in class.

(Note to the teachers: look at the preferences decided by the students and then explain them how management of income and expenditure is done)

'Family management'. There is a lot of similarity between family management and economics.

We understand from economics, how to use time, money, labour and land effectively. How to satisfy the infinite needs of the people using various resources is the study matter of economics. According to Lionel Robbins, 'Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.'

As we manage the finances of our family, similarly, villages/cities, states, countries and world also need to have economic management. Geographically speaking, the enterprises related to the production, distribution and consumption of goods and services in a specific region is called an economy. On a global level, there are three types of economies.

Geographical Explanation

After discussion on the above activity, you will realise that management of individual or family finances is mainly related to income and expenditure i.e. economic factors. This led to the birth of economics.

The word 'economics' comes from the Greek word 'oikonomia' which means

Teacher's Note

Every family manages money like a small business. When your mother buys vegetables and decides how much to spend, she is doing economics at home.

Exam Trick

Remember: Economics = Money Management. Just like you manage your pocket money, countries manage their money. It is that simple!

Points to Remember

Economics means using time, money, labour and land wisely.
The word economics comes from the Greek word oikonomia.
An economy is all the business activities in one place.
Family management and economics are very similar.
We must balance our income and expenditure.

Types of Economy

Capitalistic Economy

Ownership and management of means of production is in the hands of private individuals.

Main aim is to earn maximum profit.

Germany, Japan, the USA have adopted such a type of economy.

Socialistic Economy

The means of production belong to the society as a whole i.e. the government's control.

Main aim is to achieve social welfare.

China and Russia have adopted Socialistic type of economy.

Mixed Economy

Co-existence of private and public sectors.

A balance between profit and social welfare is made.

India, Sweden, the UK have adopted this type of system.

Teacher's Note

India is a mixed economy. This means both the government and private people run businesses. Like ISRO is government, but Reliance is private company.

Exam Trick

Remember: Capitalistic = Private people. Socialistic = Government only. Mixed = Both private and government. This is like "Papa and Mummy" both manage the house together.

Points to Remember

In capitalistic economy, private people own businesses.
In socialistic economy, only government owns everything.
In mixed economy, both private and government sectors work together.
India has a mixed economy type.
Germany and USA have capitalistic economy.

Factors Affecting An Economy

Geographical Area and natural resources

Political sovereignty

Population

Occupations

Do You Know?

Adam Smith is known as the father of economics. In his book, 'Wealth of Nations', published in 1776, he has defined economics as 'the science of wealth'.

Always Remember

Economics is an important social subject.

We use economics on a large scale in agriculture, trade, finance, administration, law and in our daily life.

Economics holds a paramount importance in the social development of humans.

Globalisation of the Economy

The recent economic policies are taking the economy towards globalisation. Globalisation means building a world economy. World economy is a borderless economy in which natural resources, profit, services, capital, labour and technology flow freely across borders of countries.

Globalisation means aligning the country's economy with the world economy. There is free trade and all restrictions on investments are set aside.

Teacher's Note

Globalisation means countries trade with each other freely. Now you can buy toys from China and America can buy mangoes from India without problems.

Exam Trick

Remember: Globalisation = No borders for business. It is like playing with children from all countries without any rules stopping you.

Points to Remember

Globalisation means making one world economy.
Goods and money can move freely between countries.
There is free trade and no restrictions.
Technology and labour also move freely across borders.
Countries work together in globalisation.

The Functions of An Economy

Every country has a different economy. Nevertheless, the main functions of economy are similar. Some of the main functions of the economy are as follows:

Deciding the product and quantity of its production

Minimise the production costs as much as possible

Distribution of national income according to social and economic justice

Making appropriate provisions for the economic needs of the future.

Deciding for whom the goods will be produced

Thus, an economy strives to create a balance between limited resources and unlimited needs.

Teacher's Note

An economy must decide what to make, how much to make, and who will get it. Like your school decides how many uniforms to buy and who gets them.

Exam Trick

Remember the four main jobs: What to make, How much to make, For whom to make, and How to keep costs low. This is like running a small shop.

Points to Remember

Economy must decide what products to make.
Costs should be kept as low as possible.
Income must be shared fairly among people.
We must plan for future economic needs.
We decide who will get the goods made.

Exercise

Can You Do It?

Suppose you are the finance minister of an agrarian country. Giving priority to overall development of the country, make a five-point programme.

Q (1) Explain The Types of Economies By Filling Correct Information In The Place of Questions In The Circle

Management in private hands

Achieving social welfare

India, Sweden and United Kingdom

Q (2) Give An Explanation

(1) Economy begins at home.

(2) India's economy is of mixed type.

(3) On the basis of economies, we can divide countries into three groups.

Q3) Write The Following Questions In One Line

(1) To which economic factor is the management of individual or family finances related?

(2) From which Greek word is the term 'Economics' derived?

(3) In capitalistic economy, to whom does the ownership and management of means of production belong?

(4) What do you mean by globalisation?

Activity

(1) Obtain information about the contribution of any Indian economist in Economics and present in the class.

(2) Consider the income and expenditure of your family and make an account sheet for it.

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