This is often not given due importance in policy formulation. Lack of resources and inefficiency of proper implementation of technology in production can lead to a decline of the economy. Therefore, the production possibility curve should be applied while producing goods and services to gauge the output level. On these assumptions, the alternatives in regard to investment targets can be set out in terms of the increases in. National income that can be achieved and the repercussions that particular investment targets would have on consumption standards at each stage in the process of development. A planned economy aiming at the realisation of larger social objectives entails a vast increase in governmental functions For these to be discharged efficiently, appropriate local, regional and functional organisations have to be built up and strengthened.
Which of the following can change without shifting the demand curve ceteris paribus?
Which of the following can change without shifting demand, ceteris paribus? The price of the good itself.
There are certain concurrent subjects in which the Centre as well as the States can undertake legislation. Economic and social planning is in the concurrent list, as this is a subject in which the Centre as well as the States are interested and have to work in unison. The Centre has certain emergency powers, but normally coordination of policies has to be effected through mutual consultation. This system of consultation and of formulation of policies on the basis of over-all national requirements will have to be strengthened in the interests of planning. Care will have to be taken to see that the plan is implemented throughout the country as a single coordinated whole. The National Development Council which has been set up recently and which comprises the Cabinet, Ministers of States and the members of the Planning Commission, with the Prime Minister as Chairman, is intended to secure this result.
At combination C, for producing additional unit of commodity X, the economy has to sacrifice 2 units of commodity Y. So, at combination C, opportunity cost is 2 units. Similarly, at combination D, for producing additional unit of commodity X, the economy has to sacrifice 3 units of commodity Y. So, at combination C, opportunity cost is 3 units and so on.
Why tourism is a labor intensive industry?
Applying the production possibility curve in an economy is important as it helps the economy to decide the combination of goods and services to be produced in order to achieve maximum resource efficiency. vertical and horizontal difference Without proper skill and basic facilities a country can not apply capital intensive technology. The use of Capital intensive techniques will create larger employment opportunity in the long run.
- With planned conservation and utilisation of resources, it should be possible to double per capita incomes in 20 years or so.
- PPC is concave because of increasing marginal opportunity cost .
- It leads to huge capital inflow shifting the production possibility curve rightward as shown in the figure.
- Raising of nutritional standards has to be an important aspect of development in India, but improvement in these standards cannot be gauged solely with reference to any particular item or items within the food group.
- Capital intensive refers back to the manufacturing that requires greater capital investment similar to monetary resources, subtle equipment, more automated machines, the newest gear, and so on.
Japan had by 1939 a population about twice as high as when it embarked on industrialisation. In periods of rapid development and changing techniques it is questionable whether the concept of an ‘optimum’ https://1investing.in/ population can have any precise meaning. In other words, the higher the rate of increase of population, the larger is likely to be the effort needed to raise per capita living standards.
Central Problems of an Economy
In planning for a better economic order, the close interrelation between the technical and social aspects of the process of development has to be continually kept in view. While there is need for concentrating effort on the more immediate problems, planning implies the readiness on the part of the community to view the social process as one whole and to take action designed to shape this process along desired lines over a defined period. For example, if Rita has a piece of land, she needs to think about what crop she should produce on her land. Let us consider that she can grow either Jowar or wheat. Given that the natural resource i.e. land is limited, she needs to choose whether she wants to use the land to produce Jowar or wheat or both. Once Rita has taken the decision regarding the goods to be produced, she needs to think about the quantity of the crop that she would like to produce.
Methods of investment planning such as project preparation, evaluation and grading together with a sound system of financial control and post-project appraisal. The management process is basically future-oriented, since it is concerned with planning the course of action for attainment of objectives in future. Difference between labour intensive and Capital intensive..
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An important technique used for project scheduling is network analysis and the determination of the critical path. In spite of considerable advance in public thinking on the subject, the acceptance of such an approach to the problems of economic development and social change represents a relatively new phase in policy-making and in administration. Planning involves the acceptance of a clearly defined system of objectives in terms of which to frame over-all policies.
What factors shift the demand curve?
Factors that can shift the demand curve for goods and services, causing a different quantity to be demanded at any given price, include changes in tastes, population, income, prices of substitute or complement goods, and expectations about future conditions and prices.
A somewhat low rate of capital formation might have been adequate for countries like the U.K. And the U.S.A., in which modern industrialism took root early. The under developed countries which make a late start have to aim at comparable development within a briefer period. Japan and the U.S.S.R. are instances in point. Some of the countries in South Eastern Europe which are now planning for rapid development have also envisaged high rates of investment.
Which of the following is not an economic goal of the firm
Marginal opportunity cost is an addition to a cost in terms of a number of units of a commodity sacrificed to produce one additional unit of another commodity. PPC is concave because of increasing marginal opportunity cost . For example, Indian economy has relatively more labour but less capital and land. Microeconomics, studies the behaviour of individual economic units of an economy, like households, firms, individual consumers and producers etc. In regard to additional income in each period ploughed back into investment, there is scope for choosing the proportions according to the rate of development desired, the measure of austerity involved, and the organsational and institutional changes necessary.
- A worker can be employed on a farm, in a factory, in a school, in a government office, self-employed and so on.
- A planned economy has inevitably in view a somewhat wider time-horizon, to which the day-to-day decisions have to be related.
- In Hungary, 10 per cent of the national income was devoted to net investment in 1947, the first year of her planning, but this appears to have been stepped up to 18 per cent in 1949.
- As the production of a good increases, the opportunity cost of that good rises.
In the last four or five decades, there has been considerable industrial development in India, accompanied by urbanisation and expansion of commerce. Large towns and cities have grown and transport and communications have developed extensively. The isolation of the village has been broken and the average citizen lives in an environment significantly different from the one in which he lived and worked fifty or sixty years ago.
Here, capital productivity is gross value added per unit of fixed assets for the year 2011. In a labour-abundant country like India, the importance of micro, small and medium enterprises cannot be overemphasised. This problem refers to the choice of technique of production. It arises when there is an availability of more than one way to produce goods and services. An economic problem generally means the problem of making choices that occurs because of the scarcity of resources.
Secondly, external assistance is acceptable only if it carries with it no conditions explicit or implicit, which might affect even remotely the country’s ability to take an independent line in international affairs. There are also obvious risks in excessive reliance on foreign aid which depends on the domestic political situation in lending countries and which might be interrupted by any untoward international developments. And yet, external resources at strategic points and stages can be of so much assistance in a period of rapid development that it is desirable, consistently with other objectives, to create conditions favourable to their inflow. What has been said in qualification of investment estimates is also true by implication of the estimates regarding resources becoming available for consumption.
What are Labour intensive jobs?
This is Economics Class 12 Introduction to Economics CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices. To conclude, it can be said that in order to attain efficiency the produced goods and services must be regulated and managed properly and systematically.
What are the 4 factors of demand?
Answer and Explanation: Four factors that affect demand are price, buyers' income level, consumer taste, and competition.
It also involves the formulation of a strategy for promoting the realisation of the ends defined. Planning is essentially an attempt at working out a rational solution of problems, im attempt to co-ordinate means and ends ; it is thus different from the traditional hit-and-miss methods by which ‘reforms’ and ‘reconstruction’ are often undertaken. A planned economy has inevitably in view a somewhat wider time-horizon, to which the day-to-day decisions have to be related. And yet, practical policy cannot operate in terms of mere set doctrines ; it must satisfy certain pragmatic tests. In spite of the considerable developments in economic and social sciences in the last few decades, our knowledge of human motivation and of social processes is but limited. We cannot always say for certain that a given set of causes will produce a particular, clearly definable, set of results and none other ; we do not always know at what rate the effects of a particular change in a part of the system will be transmitted to the other parts of the system.
The answer depends upon the rate at which the national income increases as development proceeds and the proportions of this increase which can, so to say, be ploughed back into investment. The larger the proportion of the increments to national income that can thus be ploughed back into investment, the greater is the pace at which development can be accelerated. If, for instance, a community starting with a 5 per cent rate of saving increases its total output by, say 10 per cent, and if in the following period capital formation is stepped up by an amount equal to half the additional output, the rate of saving would almost get doubled in the process. This will, no doubt, mean that the rate at which the initial levels of consumption can be allowed to go up will rise only slowly, but the pressure on consumption standards will at least be no worse than before and it might well become possible to permit moderate improvements. In other words, such a programme for stepping up capital formation calls for sustained austerity rather than any excessive degree of privation and suffering.
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