Class 8 Social Science Chapter 7: Factors of Production – NCERT Solutions

Exercise Solutions

1. How are the factors of production different from each other? What are the difficulties you faced in classifying the factors of production in the exercise given in-text?

Answer:
The factors of production—land (natural resources), labour (human effort), capital (tools, machines, finance), technology (know-how), and entrepreneurship (coordination and risk-taking)—play distinct roles in creating goods and services. Land supplies inputs, labour provides effort and skills, capital equips the process, technology improves methods, and entrepreneurship combines everything to deliver value.

Classifying them is difficult because they often overlap (e.g., a skilled technician is labour, but their expertise reflects human capital; software is technology but may also be treated as capital). Many inputs are jointly used, and their contribution shifts with scale or technique, so neat boundaries are hard to maintain.

2. How does human capital differ from physical capital?

Answer:
Human capital is an intangible stock of education, health, skills, and experience embodied in people; it grows through schooling, training, and practice. Physical capital is tangible—machines, tools, buildings, and equipment. Human capital walks into the factory each day; physical capital sits in the factory and becomes productive only when combined with people’s knowledge.

3. How do you think technology is changing how people develop their skills and knowledge?

Answer:
Technology enables anytime, anywhere learning via online courses, videos, virtual labs, and interactive apps. Learners follow personalised pathways with adaptive quizzes and rapid feedback, join communities and mentoring, and access the most up-to-date content. Micro-credentials and project platforms help people showcase real work and keep skills aligned with job-market needs.

4. A skill is something you learn and practice to get better. It helps you do things well, like playing a sport, creative writing, solving math problems, cooking, or even communicating well with people. If you could learn one skill today, what would it be and why?

Answer:
I would choose coding because it strengthens problem-solving and logical thinking, encourages creativity through projects, and opens pathways from data analysis to app design. It offers flexible careers in a digital economy and builds collaboration skills through teamwork.

5. Do you think entrepreneurship is the ‘driving force’ of production? Why or why not?

Answer:

Yes. Entrepreneurs spot opportunities, organise land, labour, capital, and technology, and take risks to turn ideas into products and services. They introduce innovation, raise quality, and create jobs. Without entrepreneurial initiative, other factors often remain under-utilised.

6. Can technology replace other factors like labour? Is this good or bad? Support your answer with the help of an example.

Answer:
Technology can substitute for some tasks (e.g., automated assembly lines) but typically complements labour by lifting productivity and safety. The impact is mixed: some roles shrink, while new jobs arise in maintenance, programming, design, and quality control.

Example: In manufacturing, robotic welding reduces errors and speeds production, yet technicians are needed for setup, monitoring, and repairs.

7. How do education and skill training affect human capital? Can they substitute for each other, or do they complement each other?

Answer:
Education builds the foundations—literacy, numeracy, and concepts—while skill training develops job-ready abilities through hands-on practice. They complement each other: education makes training more effective, and training converts education into workplace performance. Strong human capital blends classroom learning and practical experience.

8. Imagine you want to start a business that produces steel water bottles. What kind of inputs are needed? How would you obtain them? Suppose one of the factors is missing; what happens to your business operations?

Answer:
Inputs include land/premises (factory/workshop), capital (forming machines, polishing units, moulds, packaging tools), raw materials (food-grade stainless steel, caps, seals, coatings), labour (operators, quality controllers, sales), technology (design specs, safety standards), and entrepreneurship to coordinate procurement, production, and sales.

1. Procurement: supplier contracts for steel and components; equipment vendors for machinery; hiring via job boards and training institutes.

2. If a factor is missing: supply gaps or machine downtime can halt production, reduce quality, and cause missed deliveries.
   
   

9. Interview an entrepreneur or founder to understand their motivation to start a business and the opportunities and challenges they saw. You can work in pairs to create a questionnaire to collect the information and share what you have learned in a report.

Answer:
Interview snapshot from a textile entrepreneur in Gujarat:

1. Motivation: Demand for quality traditional apparel; support for local artisans; building a national presence.

2. Challenges: Early finance gaps, supplier reliability, and team building.

3. Lessons: Resilience, patient execution, disciplined cash-flow, and constant product improvement.

The findings were compiled into a short report showing how clear goals, pilot runs, and steady reinvestment supported growth.

10. Think like an economist. Let’s explore what happens when things change. If you were Ratna, what would you do in the following situations? Discuss with your classmates.

I. Suppose the rent for your space suddenly doubles.

• Will you raise the price of the food served to cover the costs?

• Will you look for a cheaper location?

• How does this affect your business?

II. Imagine one of your helpers quits suddenly.

• Can the remaining workers manage the same amount of work?

• Will you need to offer a higher salary to attract a new worker?

III. You receive a small loan to invest in better technology for your restaurant.

• Will this increase the production or improve quality?

• Will it help you reach more customers?

IV. Suppose another restaurant opens in the neighbourhood.

• How will you attract and keep your customers?

• Will you improve your service, reduce prices, or offer something new?

V. What government laws or rules should be changed to improve the ease of doing business?

Answer:
Suppose the rent for your space suddenly doubles.

• Prices: Consider a modest price revision with cost controls (supplier renegotiation, portioning).

• Relocation: Move to a lower-rent site if savings exceed relocation and footfall risks.

• Impact: Higher fixed costs squeeze margins until sales or prices adjust.

Imagine one of your helpers quits suddenly.

• Coverage: Short-term capacity depends on team size and cross-training; service speed may dip.

• Hiring: If skills are scarce, offer a competitive wage/bonus and strengthen training.

You receive a small loan to invest in better technology for your restaurant.

• Operations: Upgrades can speed service and standardise quality.

• Reach: POS/delivery integrations help serve more customers efficiently.

Suppose another restaurant opens in the neighbourhood.

• Retention: Focus on consistency, hygiene, friendly service, and loyalty deals.

• Differentiation: Add signature dishes or value combos; adjust prices strategically.

What government laws or rules should be changed to improve the ease of doing business?

• Simplify registrations and licensing; digitise clearances with time-bound approvals.

• Streamline tax compliance; enable a single-window grievance redress system.

• Transparent online workflows reduce delays, costs, and corruption risks.

Learning the Concepts: Factors of Production Class 8 NCERT (2025-26)

A clear understanding of factors of production is crucial for Class 8 Social Science. By focusing on land, labour, capital, and entrepreneurship, students can easily relate textbook theory to real-life examples, boosting confidence and exam performance.

Sharpen your preparation by reviewing each section, especially distinctions like physical capital vs human capital. Practicing NCERT-based questions ensures a strong grasp of concepts covered in the 2025-26 syllabus and helps you score better.

Remember to connect textbook knowledge with daily life. Regular revision and focus on exam tips give you an edge. Explore activities and case studies for a deeper, exam-ready understanding of Chapter 7: Factors of Production.