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Question (1)

QN0029673

A small furniture unit employs 10 workers and produces 500 chairs per month. After providing skill training to the workers, production rises to 650 chairs per month without increasing the number of workers. Which factor of production has improved the most?

(A) Land
(B) Human capital
(C) Physical capital
(D) Entrepreneurship

Correct Answer: B

Explanation:

Training improves workers' skills, knowledge and productivity, which is an enhancement of human capital.

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Question (2)

QN0029674

A farmer owns 8 hectares of land. Due to poor soil quality, output is low. He adopts soil conservation methods and irrigation facilities, increasing production significantly. Which statement best explains the change?

(A) Quantity of land increased
(B) Quality of land resources improved
(C) Labour was replaced by capital
(D) Entrepreneurship became unnecessary

Correct Answer: B

Explanation:

Better soil management and irrigation increase the productivity of existing land resources.

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Question (3)

QN0029675

A company has ₹20 lakh available for investment. It can either buy advanced machines or train workers. If the objective is to improve both efficiency and long-term productivity, the best choice is:

(A) Spend everything on machines
(B) Spend everything on training
(C) Invest in both machines and training
(D) Keep the money unused

Correct Answer: C

Explanation:

Human capital and physical capital complement each other in the production process.

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Question (4)

QN0029676

Which of the following is an example of working capital?

(A) Factory building
(B) Computer used for five years
(C) Raw material inventory
(D) Agricultural land

Correct Answer: C

Explanation:

Working capital consists of inputs that are used up during production, such as raw materials.

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Question (5)

QN0029677

A bakery's monthly expenses are Rent = ₹20,000, Wages = ₹50,000, Flour = ₹30,000 and Electricity = ₹10,000. If wages rise by 20%, what will be the new total monthly cost?

(A) ₹1,10,000
(B) ₹1,15,000
(C) ₹1,20,000
(D) ₹1,25,000

Correct Answer: C

Explanation:

New wages = ₹60,000. Total cost = ₹20,000 + ₹60,000 + ₹30,000 + ₹10,000 = ₹1,20,000.

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Question (6)

QN0029678

An entrepreneur notices increasing demand for eco-friendly bottles and starts a new business despite uncertainty about future profits. Which entrepreneurial quality is demonstrated?

(A) Ownership of land
(B) Risk-taking ability
(C) Manual labour
(D) Resource depletion

Correct Answer: B

Explanation:

Entrepreneurs take risks while making business decisions under uncertain conditions.

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Question (7)

QN0029679

A factory introduces robots that reduce the number of workers required from 100 to 70 while maintaining the same output. Which factor has mainly substituted labour?

(A) Land
(B) Entrepreneurship
(C) Capital
(D) Human capital

Correct Answer: C

Explanation:

Machines and robots are forms of capital that can replace some human labour.

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Question (8)

QN0029680

Which situation reflects an increase in human capital rather than physical capital?

(A) Construction of a warehouse
(B) Purchase of delivery vans
(C) Workers learning digital design skills
(D) Expansion of factory land

Correct Answer: C

Explanation:

Human capital refers to knowledge, skills and abilities possessed by individuals.

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Question (9)

QN0029681

A restaurant owner uses ₹5 lakh to buy kitchen equipment and ₹2 lakh for ingredients. Which amount represents fixed capital?

(A) ₹2 lakh only
(B) ₹5 lakh only
(C) ₹7 lakh
(D) Neither amount

Correct Answer: B

Explanation:

Kitchen equipment is fixed capital because it is used repeatedly for many years.

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Question (10)

QN0029682

A mining company extracts iron ore from the earth and converts it into steel. Which factor of production is represented by iron ore?

(A) Labour
(B) Capital
(C) Land
(D) Entrepreneurship

Correct Answer: C

Explanation:

Minerals and other natural resources are included under the factor 'Land'.

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Question (1)

A small furniture unit employs 10 workers and produces 500 chairs per month. After providing skill training to the workers, production rises to 650 chairs per month without increasing the number of workers. Which factor of production has improved the most?

Explanation:

Link:

Question (2)

A farmer owns 8 hectares of land. Due to poor soil quality, output is low. He adopts soil conservation methods and irrigation facilities, increasing production significantly. Which statement best explains the change?

Explanation:

Link:

Question (3)

A company has ₹20 lakh available for investment. It can either buy advanced machines or train workers. If the objective is to improve both efficiency and long-term productivity, the best choice is:

Explanation:

Link:

Question (4)

Which of the following is an example of working capital?

Explanation:

Link:

Question (5)

A bakery's monthly expenses are Rent = ₹20,000, Wages = ₹50,000, Flour = ₹30,000 and Electricity = ₹10,000. If wages rise by 20%, what will be the new total monthly cost?

Explanation:

Link:

Question (6)

An entrepreneur notices increasing demand for eco-friendly bottles and starts a new business despite uncertainty about future profits. Which entrepreneurial quality is demonstrated?

Explanation:

Link:

Question (7)

A factory introduces robots that reduce the number of workers required from 100 to 70 while maintaining the same output. Which factor has mainly substituted labour?

Explanation:

Link:

Question (8)

Which situation reflects an increase in human capital rather than physical capital?

Explanation:

Link:

Question (9)

A restaurant owner uses ₹5 lakh to buy kitchen equipment and ₹2 lakh for ingredients. Which amount represents fixed capital?

Explanation:

Link:

Question (10)

A mining company extracts iron ore from the earth and converts it into steel. Which factor of production is represented by iron ore?

Explanation:

Link:

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