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11th Standard English Medium Economics Subject Distribution Analysis Book Back 3 Mark Questions with Solution Part - I updated Book back Questions

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Std: 11th Standard - Economics

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Questions:

Generic 3

5 x 3 = 15

State the Dynamic Theory of profit.

Briefly explain the Subsistence Theory of Wages.

Distinguish between rent and quasi-rent.

List out the kinds of wages.

What are the motives of demand for money?

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Answers Key:

Generic 3

5 x 3 = 15

(i) According to Clark profit is the difference between price and cost of production.
(ii) Profit is the reward for dynamic changes in society-like increase in population, increase in volume of capital, improvement in methods of production, change in forms of industrial organisation and increase in wants of consumers.

(i) Wage is equal to the subsistence level of the labourer ie the minimum amount of food, clothing & shelter which workers & their family require for existence
(ii) If workers are paid higher wages than the subsistence level, the workers would be better off & so population increases.
(iii) So wages come down & vice versa.
(iv) So wages should not be above or below the subsistence level of the labourer.

SI.No	Rent	Quasi Rent
1	Rent accrues to land	Quasi - Rent accrues to man made appliances
2	The supply of land is fixed forever.	The supply of man made appliances is fixed for a short period only.
3	It enters into price.	It does not enter into price.
4		It is temporary.

Nominal wage or money wage:
It is paid in terms of money.
Real wage:
The wages are paid in terms of goods & services
Piece wage:
The wages are paid on the basis of quantum of work done.
Time wage:
The wages are paid on the basis of the amount of time that the worker works.

Transaction motive:
(i) The desire of the people to hold cash for the current transactions.
(ii) The amount kept for this motive depends on the income. M_t = f(y)
Precautionary motive:
(i) The desire of the people to hold cash to meet unexpected expenditure such as sickness, accidents.
(ii) The amount for this purpose depends on income. M_p = f(y)
Speculative motive:
(i) The desire of the people to hold cash in order to take advantage of the future changes in price of bonds and securities.
(ii) The amount for this purpose depends on the rate of interest. M_s = f(i)