Basic Economic Entities in an Economy

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  • Q1

    Who are primary producers?

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    Answer:

    Primary producers are those producers who exploit natural resources for producing a commodity. They are the producers of goods like forest products, food and other crops, etc. The goods produced by them fall under the category of primary products.

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  • Q2

    What do you mean by barter system?

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    Answer:

    A system where goods and services are exchanged for goods and services without the involvement of money is called barter system.

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  • Q3

    What do you understand by a consumer?

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    Answer:

    A consumer is an individual who purchases product or services for personal use and not for further manufacturing or resale. A consumer is someone who can make the decision whether or not to purchase and commodity. Consumers are not only the individual, but they can also be the groups of individuals and institutions. Their main objective is to get maximum satisfaction with their limited income.

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  • Q4

    What is firm?

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    Answer:

    A firm is a group of persons, with production tools, located in some premises, who with work, transform raw materials into goods and services, and sell them in the market.

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  • Q5

    What are the basic economic entities?

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    Answer:

    The basic economic entities are, the consumer, the producer, the households and the government of any country who are engaged in productive activities and play important roles for the smooth functioning of an economy.

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