Which of the following pairs of a basic economic activity and an example of it is correctly matched?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Exchange – a weaver gets food and clothing in return for the cloth she makes
Production makes goods or services, consumption uses them up, and exchange gives one good in return for another.
Option (1) Exchange – a weaver gets food and clothing in return for the cloth she makes — Correct. Giving cloth to get other goods is exchange.
Option (2) Production – a family eats a part of the corn it has grown — Incorrect. Eating the corn is consumption.
Option (3) Consumption – a family farm grows corn on its land — Incorrect. Growing corn is production.
Option (4) Production – a weaver gets food in return for the cloth she makes — Incorrect. Giving cloth to get food is exchange; making the cloth was the production.
NCERT (2026-27): “1.1 A Simple Economy … For example, the family farm can produce corn, use part of the produce for consumption purposes and procure clothing, housing and various services in exchange for the rest of the produce. Similarly, the weaver can get the goods and services that she wants in exchange for the cloth she produces in her yarn. The teacher can earn some money by teaching students in the school and use the money for obtaining the goods and services that she wants.” “1.2 Central Problems of an Economy Production, exchange and consumption of goods and services are among the basic economic activities of life. …” |