NCERT Class 9 Economics Chapter 1: Story of Village Palampur Economy Completes Notes Part 1

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Story of Village Palanpur

Now as we known our classes are more focused on the concept so we won’t be going into the intricacies of what exactly is the story about the village Palampur and the details about that village. Rather will focus on the concept that lies in this chapter so the concept for this chapter is basically factors of production.

Theme is Production

  • Resources combine to produce goods & services

  • Palampur – Well Connected – to Raiganj & Shahpur

  • 450 families – 80 (upper caste – large house - Pucca), 1/3rd (SC – small house in corner – mud & straw)

  • Has electricity connection

  • 2 Schools

  • Hospital – 1 PHC (Govt) & 1 Private

Now what are basically the factors of production so any resource which is used to make either goods or services would be a kind of factor of production. There are four basic factors that we work around or around which the whole of economics rotate. We will start with understanding why and how we and apply the concept of factors of production and the basic kind of frame work to understand why and how economics work.

We talks about the village which is well connected to the nearby towns it has a kind of mixture of upper-class families and ST/ SC. So you have kind of housing that is present, have pucca house as well kutcha house, good electricity connections, has schools and hospitals which are both private and government.

Production – Fundamentals

  • Production – Farming or Non-Farming

  • Aim – To get goods & services

  • 4 Factors of Production

  • Land

  • Labor – Manual & educated

  • Physical Capital

  • Fixed – Use for many years – Tools, Machines, Buildings

  • Working – Raw Material & Money – Used up in process

  • Human Capital – Knowledge & Enterprise

Understand the production factors so what is the basic economy that is sustaining that village now in India most of the village sustained by agriculture as the primary economics however there are certain villages which are non-agricultural based. So the idea is to get the goods and services there are four basic factors of production that we work around (1) land (2) labor (3) physical capital or capital and (4) human capital.

  • Land: Land is a fixed resource and have the land Area that is increasing whatever land is available and you have to work out the other factor of production on that parcel of land to increase the productivity. Also it is scarce commodity and it is not rampantly available.

  • Labor: this labor can be either manual labor or educated labor.

  • Physical capital: there are two basic concepts you have the fixed capital and working capital.

    • Fixed capital: fixed capital is the capital that is there for many years to go for example if I buy tools, machinery, tractor for agriculture it would be a fixed. It would be used years after another years.

    • Working capital: however fertilizers that I am buying, the seeds that I am buying, the crops at I am getting, the money that is being invested in would all be working capital so you have all the raw material that is put in which is used at a given point of time and is no longer available for the next year and next seasons would be a working capital.

  • Human capital: it is the knowledge the enterprise and the skill that an individual has to work around.

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