Chapter 3

NCERT
Class 10
Economics
Solutions
4. Why will Arun have a higher income from cultivation compared to Shyamal?

Question:

Why will Arun have a higher income from cultivation compared to Shyamal?

Answer:

Arun will get more income from agriculture as compared to Shyamal. The reasons for this are as follows-

(i) Arun has 7 acres of land, while Shyamal has only 1.5 acres of land.

(ii) Arun has taken a bank loan at the rate of 8.5 per cent per annum, while Shyamal has taken a loan from the moneylender of the village at the rate of 60 per cent per annum and from an agricultural trader at the rate of 36 per cent per annum. In such a situation, more of his money will be spent in liabilities.

(iii) Arun can sell his agricultural crop to anyone and at any time at the price he wants, while Shyamal has to sell the agricultural crop to the trader as per his earlier promise. In such a situation, he will not be in a position to bargain so that there is profit.

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