A family farm grows corn. It keeps part of the corn for its own food and gives the rest in return for clothing and some services. Which basic economic activities does the family carry out here?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Production, consumption and exchange
The family produces corn, consumes part of it as food, and gives the rest in exchange for clothing and services. It carries out all three basic economic activities. Each of the other options leaves one of them out.
NCERT (2026-27): “1.1 A Simple Economy … A family farm may own a plot of land, some grains, farming implements, maybe a pair of bullocks and also the labour services of the family members. A weaver may have some yarn, some cotton and other instruments required for weaving cloth. The teacher in the local school has the skills required to impart education to the students. Some others in society may not have any resource excepting their own labour services. Each of these decision making units can produce some goods or services by using the resources that it has and use part of the produce to obtain the many other goods and services which it needs. 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. …” “1.2 Central Problems of an Economy Production, exchange and consumption of goods and services are among the basic economic activities of life. …” |