MIRANDA COLLEGE OF EDUCATION SUBJECT – ICT IN EDUCATION

B.Ed 1st SEM (2014-15) HISTORY METHODOLOGY

UNIT-MEANING AND IMPORTANCE OF ECONOMICS

SUBMITTED TO SUBMITTED BYPROFESSOR BHARATHI ANURADHA

MEANING AND IMPORTANCE OF ECONOMICSOBJECTIVES OF UNIT To know the importance of consumers,

sellers, producers, services providers in economics

To know the importance of studying of economics

To be able to define economic activities , production and factors of production.

MEANING OF ECONOMICSIn everyday life we use variety of goods to

satisfy our needs like food, clothes, pens, mobiles, T.v etc. Similarly we use various services like that of doctors when we are ill, lawyers when we need legal help,etc.

These goods are not available for free. People who obtain these goods from producers and sell them to consumers are called sellers.

Farmers grow foodgrains , cobbler makes shoes and goldsmith prepares gold ornaments , all these people are called producers.

Many agricultural workers work on fields, many people work in hotels, business and commercial centers and other organisation for wages , these people are called labourers.

We use buses, trains, ships, boats.The electric and telephone company provide service for thispurpose for which pay money. The people who provide these services are called service providers.

1

•Indians from ancient time have given importace to study of economic activities , detailed information is available in manusmriti

2

•Word Economics originates from greek word okos meaning’ a house’ and nomos meaning ‘management’

3

•Economics means making good use of resources in order to bring happiness and satisfaction to all the members of the family.Adam Smith is father of Economics

IMPORTANCE OF THE STUDY OF ECONOMICSEconomics helps to understand poverty ,

unemployment, economic inequality and other related problems and find solutions for the same.

When one attempts to satisfy unlimited wants through limited income , problems of choice crop up. Economics enables us to find solutions in such situations.

When producers want to create goods and services , they are faced with questions like – what to produce ? How to produce? Whom to produce? At what price to produce? Knowledge of economics guides them on such occasions.

Economics identifies reasons for rise and fall of prices and results of such fluctuations . It provides ideas to bring stability in prices

Economics suggests ways to make use of milited resources with care and efficiency and also pass them to next generation.

CLASSIFICATION OFECONOMIC ACTIVITIES-wants are base for all economic activities since they are unlimited 1.PRODUCTION

ACTIVITIESInlclude production of

goods and services , ex agriculture , mining and fishing

2.CONSUMPTION ACTIVITIES

Goods and services and produced for consumption ,man satisfies his wants by buying them.

3.EXCHANGE ACTIVITIESIn this system , activities

of collection of goods , transportation, selling and buying take place.

4.DISTRIBUTION ACTIVITIES

The income that is earned through production of goods has to be distributed to various factors of production.

PRODUCTION1. Nature has provided land, water , forests ,

etc which man uses to produce whatever goods he wants. This process is called production.

2. Many primary goods cannot be consumed directly , man has to change the form of the primary goods and produce variety of goods to satisfy his wants.

3. Goods which are manufactured by changing the form of the primary goods are called manufactured goods.

FACTORS OF PRODUCTIONLAND It refers to land

comprising barren land , water , forest , minerals, and other natural resources. It is limited in nature

Land is necessary for agriculture, Industries , expansion of towns, roads, etc

LABOURPeople who work are called

labourers. Labourers provide their hard

work in return for money.Farmers, industrial workers,

garage workers exert physical energy which is called physical labour

Clerks, officers,teachers,doctors, etc exert mental labour which is called intellectual labour

Minimum wages act announces minimum wages.

FACTORS OF PRODUCTIONPHYSICAL CAPITALAll kinds of

manufactured goods used in production are called physical capital like machines and tools

Government supports establishing factories, power stations , transport mediums which lead to capital formation and further increases production

HUMAN CAPITALPeople who have

knowledge to gather factors of production and produce goods and services are called human capital

Goods are produced from factors of production which leads to revenue generation which inturn is distributed among factors of production