Chapter 1.

The Story of Village Palampur

Q1. What is aim of production? (1)
The aim of production is to produce the goods and services that we want.

Q2. Explain the factors of production. Support your explanation with proper
illustrations. (5)

There are four requirements for production of goods and services; they form the
pillar of any production activity. They are explained below:

i) Land - Land includes all the natural resources like- sunlight, air, water, minerals
etc.,
a. Land or the Natural resources form the bases of any production as all the raw
materials are extracted from natural resource.
Some of the examples would be – Petrol, agriculture, different modes of transport (all
the businesses are dependent on it), fishing, mining etc.
b. There is scarcity of natural resources – Natural resources are limited and have
alternate uses. The use of natural resources should be optimum (no wastage) so
that it is used to maximum benefit.
c. Land (Natural Resources) are unevenly distributed – The world is unevenly
divided with different landforms (some countries have more plains, some have more
water bodies, some have mountains etc.)

ii) Labour – It refers to the amount of physical, mental, and social effort used to
produce goods and services in an economy. They earn income in the form of wages,
salaries, compensation, bonus etc., They provide their labour both in organised as
well as unorganised sector. Labour is the factor of production, which will work and
give the required output.
a. Physical Labour – They provide their labour in the form of physical work such as
construction labourer, site workers, factory worker, housekeeping staff, waiters,
cleaners etc.
b. Mental Labour – They provide their labour with their mental activity such as tele
operators working in call centres, BPO staff, clerical staff in various offices etc.,
c. Social Labour – They provide their labour for uplifting the society such as
teachers, social workers, NGO workers, nurses, etc.,

(iii) Physical Capital / Capital : It refers to financial wealth especially that is used to
start and maintain a business. It is broadly classified into fixed capital and working
capital
a. Fixed capital: The capital that can be used in production for many years, are
referred as fixed capital. It is invested to acquire fixed assets, which supports the
production activity for longer period. They are usually invested at the beginning of
the any production activity. For example- Tools, machines, buildings etc.
b. Working Capital: It is used to serve the day-to-day capital requirement in any
production activity. It serves the production activity for a very short period. It is
required daily for smooth functioning of production activity. Some examples of
working capital: cash in hand, raw materials, cash in bank etc.

(iv) Human Capital : Human capital activities involve not merely the transmission
and embodiment in people of available knowledge, but also the production of new
knowledge which is the source of innovation and of technical change which propels
(helps to move forward) all factors of production.

Q3. What are the standard unit of measuring land also mention the local units
used in India to measure land? (1)

The standard unit of measuring land is hectare. In India, the local units to measure
land are bigha, guintha, acre etc.

Q4. Is it important to increase the area under irrigation? Why? (3)

Yes, it is important to increase the area under irrigation. Some of the reasons are
discussed below:
a. Increasing Population: The population is increasing rapidly and everybody
should be feed.
b. Increase in Income: As the population grows, there is necessity for increase in
the income. Income in a village can increase only after area under irrigation is
increased.
c. Boost to GDP: Increased in irrigation helps to boost the economy of a country as
it gives boost to the GDP, which helps to increase the standard of living of citizens.

Q5.Is there a way one can grow more from the same land? Explain. (3)
Yes, there are two common ways to grow more from the same land, they are :
a. Multiple Cropping & b. Modern Farming.
a. 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. For example in Palampur: All farmers grow at
least two main crops in different seasons. In between, they grow third crop such as
potato.
b. Modern Farming: Modern farming means farming using modern techniques and
technology. That means farming with the facilities of modern science and
technologies. Using modern science and technologies in farming increase the
farming productions.
For example : Farmers of Punjab, Haryana and Western Uttar Pradesh used modern
farming by setting up tube wells for irrigation, use of High Yield Variety (HYV) seeds.
Q6. What do you understand by the term ‘Multiple cropping’? Or
Write a short note on ‘Multiple Crop. (3)
Multiple Cropping -
1. Multiple Cropping is a technique to grow more than one crop on a piece of land
during the year.
2. It is the most common way of increasing production on a given piece of land.
3. It helps the farmers to increase their income.
4. The land is not kept idle throughout the year as they are used for irrigation of
different crops depending on the season. As a result, it helps to utilise the natural
resource (land) optimally for maximum benefit.
For example in Palampur: All farmers grow at least two main crops in different
seasons. In between, they grow third crop such as potato.

Q7. Distinguish between Traditional Farming and Modern Farming. (3)

Traditional Farming Modern Farming

1. Traditional farming means farming
done by using traditional tools, natural
resources, organic fertilizers.
2. Traditional seeds are used for this
type of farming.
3. Capital requirement is very less in
traditional framing as fertilizers, seeds
etc., are available with the farmers and
they need not buy them.
4. The yield is very low in tradition
farming
1. Modern farming means farming
using modern techniques and
technology.
2. High yield variety (HYV) seeds are
used for this type of farming.
3. Huge capital requirement is required
in modern farming as seeds, fertilizers
and other tools are to be purchased.
4. Yield is more in modern farming as
HYV seeds are used for irrigation.

Q8. Write a note on Green Revolution. (3)

Green Revolution: It refers to the introduction of High yielding variety (HYV) of

seeds and increased use of fertilizer and irrigation methods.

1. It was introduced to Indian farmers in late 1960’s for cultivation of wheat and rice
by using high yield variety of seed (HYV).

2. It was aimed at providing increase in production to make India self-sufficient in

food grains. As compared to traditional seeds, HYV seeds promised to produce
much greater amount of of grain on a single plant.

3. Farmers of Punjab, Haryana and Western Uttar Pradesh were the first to try out
modern farming in India. This was only useful for crops like wheat and rice.
Q9. Write advantages and disadvantages of modern farming (Green Revolution) (3)
Green Revolution: It refers to the introduction of High yielding variety (HYV) of
seeds and increased use of fertilizer and irrigation methods.
Advantages if Modern Farming / Green Revolution
1. It allows us to produce more food than traditional growing methods.
2. It causes a reduction in food prices for the global economy.
3. It creates higher income levels for the farmers.
4. It supports other sectors of the economy.
Disadvantages Modern Farming / Green Revolution:
1. It reduces the quality of the soil used for growing crops.
2. It is associated with the loss of soil fertility due to increased use of chemical
fertilizers.
3. There is lot of water requirement for HYV seeds, which leads to depletion of water
table.

Q10. Which states where first to try out the modern farming? (1)
Farmers of Punjab, Haryana and Western Uttar Pradesh were the first to try out the
modern farming.

Q11. What is yield? (1)

Yield is measured as crop produced on a given piece of land during a single season.

Q12. Distinguish between Fixed Capital and Working Capital. (2)

Fixed Capital Working Capital

1. The capital that can be used in 1. It is used to serve the day-to-day
production for many years, are referred capital requirement in any production
as fixed capital. activity.
2. It is invested to acquire fixed assets,
2. It is serves the production activity for
which supports the production activity a very short period. It is required daily
for longer period. for smooth functioning of any production
activity.
For example: Tools, machines, buildings Some examples of working capital are
etc. are referred as fixed capital. Cash in hand, raw materials, cash in
bank etc.

Q13. Write a note on following: (3 Marks each)

(i) Land (Natural Resources) –
a. Land or the Natural resources form the bases of any production as the all the raw
materials are extracted from land/natural resource. Some of the examples would be
– petrol, agriculture, fishing, mining, different modes of transport (all the business
dependent on it like: roadways, railways, waterways & airways), etc.,
b. There is scarcity of natural resources – Natural resources are limited and have
alternate uses. The use of natural resources should be optimum (no wastage) so
that it is used to maximum benefit.
c. Land (Natural Resources) are unevenly distributed – The world is unevenly
divided with different land forms (some countries have more plains, some have more
water bodies, some have mountains etc.,)

ii) Labour – It refers to the amount of physical, mental, and social effort used to
produce goods and services in an economy. They earn income in the form of wages,
salaries, compensation, bonus etc., They provide their labour both in organised as
well as unorganised sector. Labour is the factor of production, which will work and
give the required output.
a. Physical Labour – They provide their labour in the form of physical work such as
construction labourer, site workers, factory worker, housekeeping staff, waiters,
cleaners etc.
b. Mental Labour – They provide their labour with their mental activity such as tele
operators working in call centres, BPO staff, clerical staff in various offices etc.,
c. Social Labour – They provide their labour for uplifting the society such as
teachers, social workers, NGO workers, nurses, etc.,

(iii) Capital / Physical Capital: It refers to financial wealth especially that is used to
start and maintain a business. It is broadly classified into fixed capital and working
capital.
a. Fixed capital: The capital that can be used in production for many years, are
referred as fixed capital. It is invested to acquire fixed assets, which supports the
production activity for longer period. They are usually invested at the beginning of
the any production activity. For example: Tools, machines, buildings etc. are referred
as fixed capital.
b. Working Capital: It is used to serve the day-to-day capital requirement in any
production activity. It is serves the production activity for a very short period. It is
required daily for smooth functioning of any production activity. Some examples of
working capital: Cash in hand, raw materials, cash in bank.

Q14. What do you understand by the phrase “Land is fixed”? (3)

Land is a natural resource and it cannot be increased or decreased. The above
phrase can be explained with reference to Palampur Village.
Cultivated area over the years in Palampur Village

Year Cultivated Area(million hectare)

1990 140
2000 140
2010 155
2112 155
1. 75% of population of Palampur is dependent on farming for their livelihood. Their
wellbeing is related to production on the farms.
2. Since decades there has been no expansion in land area under cultivation, only
some of the waste lands in the village had been converted to cultivable land.
3. There is no scope to increase farm production by bringing new land under
cultivation.
Q15. What is known as factors of production? (1)
Every production is organised by combining land, labour, physical capital (fixed and
working) and human capital, which are known as factors of production.

Q16. How is land distributed between the farmers in Palampur? (3)

The land in Palampur is fixed and from decades, the cultivable land is fixed. The
land in Palampur is unevenly distributed, which can be explained through the
following table:

No. of Families Size of Land (in hectares)

150 families (1/3 of 450 families, mostly Landless
Dalits - Farm labours)
240 families (Small farmers) Less than 2 hec.
60 families (Medium and Large) More than 2 hec. some also have more
than 10 hec. of land

There are 450 families in Palampur the distribution of land is explained:

1. 1/3rd of 450 i.e. 150 families are landless most of them are dalits and have no land
for cultivation so they work as farm labours on medium and large farmers land.
2. 240 families cultivate small plots of land less than 2 hectares in size. Cultivation of
small farms does not bring adequate income to the famer’s family.
3. 60 families of medium and large farmers cultivate more than 2 hectares of land.
Few of them are large farmers and have land extending over 10 hectares or more.

Q17. Why labours are cheap in developing countries? Explain. (3)

One of the most fundamental distinctions between developing and developed

countries is the abundance of labour and the scarcity of capital in the developing
countries. The few reasons for cheap labours in developing countries are:
1. Increasing rate of population : As a country is developing the birth rate remains
constant and the death rate decreases as a result there is increase in population,
which results in abundance of labour supply.
2. Poverty: Agriculture is a major sector of employment in many developing
countries. Most of the people do not earn much and they are forced to work as
labour.
3. Illiteracy: As the there is increasing rate of population and high poverty level
many families force their children to work as labour and they are deprived of
education, which leads higher rate of illiteracy as a result they increase the supply of
labour.

It results in more supply of labour who are forced to work at a cheaper rate as they
are in need of money for survival.
Q18. Why there is scarcity of labours in developed nations? Explain. (3)

There is scarcity of labours in developed nations some of the reasons are explained
below:
1. Decrease in rate of population: As the country develops the life expectancy rate
also increases and as a result the rate of working population in on decline. This is
the major reason for scarcity of labour in developed nation.
2. Higher level of Education: In developing countries the education system is not
much inclined towards technical education so the skills for labour is not developed.
3. Better Infrastructure: As the society is developing, people are aware about their
duties and they pay their taxes. This in return helps the government to provide
better infrastructure of the country. This also includes many facilities for the citizen’s
like: unemployment benefit.

Q19. Who provides labour in Palampur? (2)

Two groups provide the labour in Palampur:
(i) Landless Families: They provide their labour to the medium and large farmers as
work on their field as farm labourers.
(ii) Small Farmers: They along with their families cultivate their own fields and
sometimes they are hired as farm labourers by the medium and large farmers to
work on their fields.

Q20. How capital is generated in Palampur? (3)

The capital is generated in different ways at different levels:
(i) Landless Families: As they are working as labourers in others field they are earn
wages in the form of cash or kind (any crop or meal). When they are in need of
money, they borrow it from large farmers or landlords.

(ii) Small Farmers: They have very less surplus from their yield so they get very less
income from farming. Some of them are involved in some non-farming activities such
as dairy, small scale manufacturing to support their family. Some of them also work
as farm labourers and earn wages. They also borrow money from traders, large
farmers or landlord to support their farming activities.

(iii) Medium Farmers/Large Farmers : They earn from huge surpluses. In addition,
they lend money to needy people in the villages so they earn interest. They also
save their money in bank and earn interest. The also invest in farming equipment
and increase their fixed capital which helps to increase they yield for future and
increase their income.

Q21. What is surplus? (1)

The extent to which generation of goods exceeds their consumption is called
surplus.
Surplus = Total Production - Consumption
Q22. What do you understand by non-farming activities? What are some of
non-farming activities performed in Palampur? Explain some. (5)

75% of the people are dependent on farming ac vi es for their livelihood, the remaining
25% of the people working in Palampur are engaged in the ac vi es other than agriculture,
which is categorised as non-farming ac vi es. Unlike farming ac vi es, non-farming
ac vi es require less land. People with some amount of capital can set up non-farming
ac vi es.

There are many non-farm ac vi es some of them such as dairy, small-scale manufacturing,
transport, and compute ins tute, school, shop keeping are explained:

1. Dairy – (the other common ac vity) Dairy is a common ac vity in many families of Palampur.
People feed their buffalos on various kinds of grass and the jowar and bajra that grow during the
rainy season. The milk is sold in Raiganj (nearby large village) from their it is transported to different
towns and ci es.
2. Small-scale manufacturing - Small scale manufacturing is not yet developed in Palampur as only
50 people are engaged in manufacturing. People are involved in very simple produc on method,
which are done on a small scale. These ac vi es are carried out mostly at home or in the fields with
the help of family member.
3. Shop keeping – The people involved in trade are not many in Palampur. The traders are
shopkeepers who purchase variety of good from wholesale markets from ci es and sell them in the
village. Basically, they sell general items like rice, wheat, sugar, tea, oil, biscuits, soap etc. 4.
Transport - There are variety of vehicles connec ng Palampur to Raiganj. Rickshawallahs,
tongawallahs, jeep, tractor, truck drivers and people driving bullock cart etc are in transport services.
They ferry people and goods from one place to another and in return they earn their livelihood. The
number of people employed in transport has grown over the years.

Good Luck …. Happy Learning…….