Economics, Economic Activity, Organization of Production

1. The Story of Village
Palampur
By- Ravi Raj Kamal
Master of Arts (Political Science)
University of Delhi

2. Economics
• Economics is a social science concerned with the production,
distribution, and consumption of goods and services. It studies how
individuals, businesses, governments, and nations make choices about
how to allocate resources.
• Economics is about the study of scarcity and choice.
• In its most simple and concise definition, economics is the study of
how society uses its limited resources.

3. Economic Activity
Human activity which generate income are called economic activity.
• Primary Activity: Farming, fishing, mining, floriculture
• Secondary Activity: Finish goods
• Tertiary Activity: Services like Doctor, Teaching, Transport

4. Introduction
• Palampur is well-connected with neighbouring Villages & Towns.
• Farming is the main activity in Palampur, whereas several other
activities such as small scale manufacturing, dairy, transport, etc. are
carried out on a limited scale.
• These production activities need various types of resources — natural
resources, manmade items, human effort, money, etc.
• Transport like bullock carts, tongas, bogeys, jeeps, etc. are available.
• Electric powered tubewells are available.

5. • This village has about 450 families belonging to several
different castes.
• The 80 upper caste families own the majority of land in the
village. Their houses, some of them quite large, are made of
brick with cement plastering.
• The SCs (Dalits) comprise one third of the population and
live in one corner of the village and in much smaller houses
some of which are of mud and straw.
• Palampur has two primary schools and one high school.
There is a primary health centre run by the government and
one private dispensary where the sick are treated.

6. • Palampur is well developed and connected with neighbouring
villages and towns like Raiganj and Shahpur.
• The story of village Palampur is imaginary that will allow us
to know about farming well.
• There are two types of activities in Palampur
❖ FARM ACTIVITIES
❖ NON-FARM ACTIVITIES

7. Organization of Production
There are four requirements for production of goods and
services.
• Land
• Labour
• Physical Capital
❖Fixed Capital
❖Working Capital
• Human Capital

8. • The First requirement is land, and other natural resources
such as water, forests, minerals.

9. • The second requirement is Labour, i.e., people who will do the work.
• Some production activity requires highly educated workers to perform
the necessary tasks.
• Other activities requires workers who can do manual works.

10. • The third requirement is Physical Capital, i.e., the variety of
inputs required at every stage during production.
• Tools, machines, buildings: used in production over many
years, and are called fixed capital.
• Raw material and money in hand: Working Capital

12. • The Fourth requirement is Human Capital/Human
Resource.
• We need knowledge and enterprise to be able to put together
land, labour and physical capital to produce an output either
for own consumption or to sell in the market. This is called
Human Capital.

13. What's makes Human Capital?

14. 1. Farmer’s plough is an example of which factor of
production?
2. What are the examples of fixed and working capital?
3. What are the factors of production? According to you which
is most important.