Page 394 - DECO401_MICROECONOMIC_THEORY_ENGLISH

Unit-27: Production Versus Consumption

Self Assessment Notes

Multiple choice questions:
3. The economists of 19th century emphasizes................... .
(a) on supply (b) on expenditure (c) on buy (d) to sale
4. The weakness means.................... .
(a) shortage of money (b) physical shortage (c) shortage to buy (d) none of these
5. ....................... economists knew that supply creates its own demand.
(a) 20th Century (b) 19th Century (c) 18th Century (d) 17th Century
6. ....................... economists knew that demand creates its own supply.
(a) 19th Century (b) 20th Century (c) 18th Century (d) 17th Century

27.3 Production Limits the Consumption

Productionists means the economists of 20th century think that to care the children, parents expend
and they expend on productive products. The market gets products by production and the production
occurs for those products which are in desire. However, the supply of all desires is not possible. So
production limits the consumption.

Self Assessment

State whether the following statements are True/False:
7. Demand is directly related to consumption.
8. The analysis of Keynes was mainly depends upon demand.
9. ‘Wealth of British’ is written by Adam Smith.
10. Production cannot possible without consumption.

27.4 Summary

By the above analysis it is evident that consumption and production is not opposite to each other but
they are is directly proportional to each other. Because, if there is no consumption, production will not
happen and if consumption is not possible without production.

27.5 Keywords

• Production: To create
• Consumption: Consumption

27.6 Review Questions

1. What do you mean by Production and Consumption? Explain it.
2. "Production limits consumption". Explain it.
3. Give your views on weakness.

LOVELY PROFESSIONAL UNIVERSITY 387