1) A- Truck Driver – It belongs to Human Resource and among the four factors of production it

belongs to Labor. The work time and work effort that people devote to producing goods and
services is called labor. Labor earns wages. A truck driver spends his time and effort to drive
truck. He earns wages. So, a truck driver is human resource.

2) Minerals – Minerals belong to natural resource, and natural resource belong to Land. Land is the
gift of nature that we use to produce goods and service. Land earns wages. Minerals used to
produce fuel for vehicle, in the manufacture of plastics and so on. It also used to produce many
necessary chemical compounds and different metals. So, it is a natural resource.

3) Coal – It also belongs to natural resource, and natural resource belong to Land. Coal can be
processed in the industry to get some useful products such as coke, coal tar, and coal gas etc.
We can use it to generate electricity, heating for homes and offices and so on. So, it is a natural
resource.

4) A power Tiller – It belongs to Manmade resource and manmade resource belong to Capital.
Capital means the tools, machine, equipment, buildings, and other constructions that business
use to produce goods and services. A power tiller is man-made and it is used to pumping water,
preparing the soil, planting seeds etc.

5) A Taxi Cab – It also belongs to Man made resource and manmade resource belong to Capital.
Capital earns interest. A taxi cab is made by human and it is used for transportation service. A
cab owner gets interest from his taxi.

6) A Forest – It is a Natural resource and among the four factors of production it belongs to Land. It
is a gift of nature. Forest provides us food, wood, fuel and various necessary elements that we
use to produce our goods and services.

7) A sales person: It belongs to Human Resource and Human resource belongs to labor. The work
time and work effort that people devote to producing goods and services is called labor. Labor
earns wages. A salesperson devotes his/her time and effort to give sales services, as a result
he/she gets wages for his service. So, a salesperson is Human resource.

10) When we choose a option we must give up another option . That means we must give up the value
of another option for our chosen option. This value that we give up for choosing something is called
opportunity cost. It is the real cost of something that we must give up to get it.

For example: I have a balance of 1500 in my Debit Card . Now I can be enrolled in an Online facebook
Marketing course with this balance , or I can order a branded purse for my best friends upcoming
birthday.
Suppose I have chosen to order the purse for my best friend. Now its not possible for me to be enrolled
in the Facebook marketing course with my balance. That means I had to given up the opportunity to
learn facebook marketing. This given up value is my opportunity cost.

9. Draw and explain circular flow diagram of income and expenditure.

Here, Household is a person or group of people that share their income. It is consumption unit.

Firm is production unit. hires factors of production and organizes those factors to produce and sell
goods and services.

Factor market is a market where factors of production are purchased and sold and goods market is a
market where goods and services are purchased and sold.

Y-Values
45

40

35

30

25

20

15

10

0
0 10 20 30 40 50 60 70 80