CLASS 11TH ECONOMICS CBSE NCERT - INTRODUCTION TO STATISTICS - MCQ, SAQ & LAQ WITH KEY NOTES

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                 CLASS - 11TH

                   STATISTICS

                        Part A:

Introduction to Statistics Class 11 

TOPICS :

What is Economics?

Meaning, scope, functions and importance of statistics in Economics.

MCQ Questions Economics

1._____ is one who consumes goods and services for the satisfaction of their wants.

(a) Producer

(b) Consumer

(c) Investor

(d) All of the above

Answer

Answer: (b) Consumer

2. ______ is the one who produces or sells goods and services for the generation of income.

(a) Producer

(b) Consumer

(c) Investor

(d) All of the above

Answer

Answer: (a) Producer

3. Saving and Investment are_______activity

(a) Production

(b) Consumption

(c) Economic

(d) Non-economic

Answer

Answer: (c) Economic

4. Act of abstinence from consumption is known as______.

(a) Production

(b) Savings

(c) Investment

(d) Consumption

Answer

Answer: (b) Savings

5. _____ implies scarcity of limited resources with regards to unlimited wants.

(a) Production

(b) Consumption

(c) Economic activity

(d) Non-economic activity

Answer

Answer: (c) Economic activity

6.“Economic activity is the study of mankind in the ordinary life of business”, this definition was given

by;

(a) Alfred Marshall

(b) Robbins

(c) Peterson

(d) None of the above

Answer

Answer: (a) Alfred Marshall

7. Which of the following are Components of economics?

(a) Consumption

(b) Production

(c) Distribution

(d) All of the above

Answer

Answer: (d) All of the above

8. Which of the following are the features of statistics in the plural sense?

(a) It is a aggregate of facts

(b) Statistics is numerically expressed

(c) Both (a)&(b)

(d) None of the above

Answer

Answer: (c) Both (a)&(b)

9. Which of the following is not one of the limitations of statistics?

(a) Statistics study numerical facts only

(b) Statistical results are true only on averages

(c) Heterogeneous data is required

(d) Statistics study aggregates only

Answer

Answer: (c) Heterogeneous data is required

10. Which of the following are regarded as the importance of economics?

(a) Statistics is a quantitative expression of economic problems

(b) Statistics works out cause and effect relationship

(c) Statistics facilitates economic forecasting

(d) All of the above

Answer

11. Read the following statement given the and choose the correct alternative

Statement 1- Resources are always limited in relation to human wants.

Statement 2- Not all the resources have alternative uses

(a) Both are correct

(b) Both are incorrect

(c) Statement 1 is correct and statement 2 is incorrect

(d) Statement 1 is incorrect and statement 2 is correct

Answer

Answer: (c) Statement 1 is correct and statement 2 is incorrect

12. Read the following statement given below and choose the correct alternative

Statement 1- Agents of production are the owners of factors of production

Statement 2- Social components of economics are poverty and unemployment

(a) Both are correct

(b) Both are incorrect

(c) Statement 1 is correct and statement 2 is incorrect

(d) Statement 1 is incorrect and statement 2 is correct

Answer

Answer: (a) Both are correct

13. Read the following statement given below and choose the correct alternative

Statement 1- Statistics is a qualitative measure

Statement 2- Only aggregate number of facts is called statistics

(a) Both are correct

(b) Both are incorrect

(c) Statement 1 is correct and statement 2 is incorrect

(d) Statement 1 is incorrect and statement 2 is correct

Answer

Answer: (d) Statement 1 is incorrect and statement 2 is correct

14. Read the following statement given below and choose the correct alternative

Statement 1- All statistics are data

Statement 2- All data are not Statistics

(a) Both are correct

(b) Both are incorrect

(c) Statement 1 is correct and statement 2 is incorrect

(d) Statement 1 is incorrect and statement 2 is correct

Answer

Answer: (a) Both are correct

15. Read the following statement given below and choose the correct alternative

Statement 1- Inferential statistics refers to the methods of collection, presentation and analysis of

data

Statement 2- Descriptive statistics refers to the methods by which conclusions are drawn.

(a) Both are correct

(b) Both are incorrect

(c) Statement 1 is correct and statement 2 is incorrect

(d) Statement 1 is incorrect and statement 2 is correct

Answer

Answer: (b) Both are incorrect

16. Read the following statement given below and choose the correct alternative

Assertion(A)- Statistics is the lifeline of economics

Reason (R) – Statistics helps to establish various statistical relationship

(a) Both Assertion and reason are true. Reason is the correct explanation of assertion

(b) Both assertion and reason are true. Reason is not the correct explanation of assertion

(c) Assertion is true but reason is not

(d) Reason is true but assertion is not

Answer

Answer: (a) Both Assertion and reason are true. Reason is the correct explanation of assertion

17. Read the following statement given below and choose the correct alternative

Assertion(A)- Statistics is a rainbow of lies

Reason (R )- Anyone can alter statistics to arrive at predetermined conclusions

(a) Both Assertion and reason are true. Reason is the correct explanation of assertion

(b) Both assertion and reason are true. Reason is not the correct explanation of assertion

(c) Assertion is true but reason is not

(d) Reason is true but assertion is not

Answer

Answer: (d) Reason is true but assertion is not

18. Read the following statement given below and choose the correct alternative

Assertion (A)- Distrust on statistics can not be removed and is inevitable

Reason (R )- Statistics is a clay which we can use to make a god or devil, as we wish

(a) Both Assertion and reason are true. Reason is the correct explanation of assertion

(b) Both assertion and reason are true. Reason is not the correct explanation of assertion

(c) Assertion is true but reason is not

(d) Reason is true but assertion is not

Answer

Answer: (d) Reason is true but assertion is not

19. Read the following statement given below and choose the correct alternative

Assertion (A)- If your class teacher estimates average height of the whole class on the basis of

average height of four or five students he is using inferential Statistics

Reason (R )- Inferential statistics refers to all such methods by which conclusion can be drawn relating

to the population of a given sample

(a) Both Assertion and reason are true. Reason is the correct explanation of assertion

(b) Both assertion and reason are true. Reason is not the correct explanation of assertion

(c) Assertion is true but reason is not

(d) Reason is true but assertion is not

Answer

Answer: (b) Both assertion and reason are true. Reason is not the correct explanation of assertion

20. Read the following statement given below and choose the correct alternative

Assertion (A)- Statistics can be collected in a systematic manner

Reason (R )- No conclusions can be drawn from unsystematic collection of data

(a) Both Assertion and reason are true. Reason is the correct explanation of assertion

(b) Both assertion and reason are true. Reason is not the correct explanation of assertion

(c) Assertion is true but reason is not

(d) Reason is true but assertion is not

Answer

Answer: (a) Both Assertion and reason are true. Reason is the correct explanation of assertion

VISHAL TUITION CLASSES, ASANSOL 

Question 19: Which of the following statements is not an example of Statistics?

(a) Birth rate in India is 18 per thousand as compared to 8 per thousand in the US.

(b) Ramesh has a Rs. 100 note in his pocket.

(c) Over the last 10 years, India has won 60 text matches in cricket and lost 50.

(d) Average pocket allowance of the students of Class XI is Rs. 500 per month.

Answer : B

Question 20 : Statistics is defined in terms of numerical data in the:

(a) Singular Sense

(b) Plural Sense

(c) Either (a) or (b)

(d) Both (a) and (b)

Answer : B

Question 21 : Which of the following is correct regarding Statistics?

(a) Aggregate of facts

(b) Numerically expressed

(c) Affected by multiplicity of causes

(d) All of these

Answer : D

Question 22: In singular sense Statistics means:

(a) statistical science

(b) statistical law

(c) both (a) and (b)

(d) none of these

Answer : C

Question 23: Which of the following indicates a stage of statistical study?

(a) Collection of data

(b) Presentation of data

(c) Analysis of data

(d) All of these

Answer : D

Question 24: In plural sense, which of the following is not a characteristic of Statistics?

(a) Aggregate of data

(b) Only expressed in words

(c) Affected by multiplicity of causes

(d) Collected in a systematic manner

Answer : B

Question 25: The process of converting raw material into goods is called:

(a) production

(b) saving

(c) investment

(d) exchange

Answer : A

Question 26: The aggregate of data is called:

(a) Statistics

(b) editing of data

(c) analysis of data

(d) collection of data

Answer : A

Question 27: The statistics is concerned with:

(a) Aggregate of organised facts

(b) Aggregate of disorganised facts

(c) Aggregate of useless facts

(d) Aggregate of unrelated facts

Answer : A

Question28 : Which of the following is an economic activity?

(a) Production

(b) Consumption

(c) Distribution

(d) All of these

Answer : D

Question :29.  The proper use of statistics can be made by:

(a) Cheats

(b) Everyone

(c) Experts

(d) Common Man

Answer : C

Question 30: Which of the following statements is incorrect?

(a) Resources have alternative uses

(b) All numbers are Statistics

(c) Macroeconomics studies large aggregates

(d) Statistics studies only the aggregates of quantitative facts

Answer : B

Question 31: Statistics is the science of analysing:

(a) Qualitative data

(b) Quantitative data

(c) Any kind of data

(d) Both (a) and (b)

Answer : B

Question 32: Distrust of statistics is due to:

(a) Misuse of statistics

(b) Insufficient statistical methods

(c) Scope of statistics is limited

(d) Limitations of statistics

Answer : A

Question :33. Statistics as a plural noun indicates:

(a) Statistical methods

(b) Descriptive statistics

(c) Statistical data

(d) Inductive statistics

Answer : C

Question 34: Statistics as a singular noun means:

(a) Statistical data

(b) Statistical methods

(c) Inductive statistics

(d) Descriptive statistics

Answer : B

Question 35: With regards to distrust of Statistics which of the following statements is not

correct?

(a) Statistics is a rainbow of lies

(b) Statistics are tissues of falsehood

(c) Statistics express the facts in numbers

(d) There are three kinds of lies-lies, damned lies and statistics

Answer : C

Question 36: The word ‘statistics’ is used as:

(a) Singular

(b) Plural

(c) Singular and Plural both

(d) None

Answer : C

                Key Notes...  

1. CONSUMER - When you buy goods (you may

want to satisfy your own personal

needs or those of your family or those of any other person to whom you want to make a gift) you are called a consumer.

Simply, 

Consumers can be defined as an individual or group of people who purchase or use goods and services solely for personal use, and not for manufacturing or resale.

2. SELLER - 

When you sell goods to make

a profit for yourself (you may be

a shopkeeper), you are called a seller.

3. PRODUCER - When you produce goods (you may

be a farmer or a manufacturer), you

are called a producer.

Simply,

A producer is someone who creates / provides a good or service to other people

4. EMPLOYEE OR SERVICE HOLDER -

When you are in a job, working for

some other person, and you get paid

for it (you may be employed by

somebody who pays you wages or a salary), you are called a service-

holder/Employee.

5.SERVICE PROVIDER - When you provide some kind of

service to others for a payment (you

may be a lawyer or a doctor or a

banker or a taxi driver or a transporter of goods), you are called a service-provider.

6. Economic activities are such activities that are undertaken/DONE for a monetary

gain. This is what economists mean

by ordinary business of life.

7. PURPOSE OF THE STYDY OF ECONOMICS - Economics involves

the study of man engaged in economic activities of various kinds.

8. Economics is often

discussed in three parts: 

consumption, production and distribution. VVI

9. We want to know how the

consumer decides what to buy when he knows the prices When he has many alternative goods to choose from in his specific income . This is the study of Consumption.

or, The consumption in economics refers to the final purchase of goods and services by individuals. 

10. We also want to know how the

producer, similarly, chooses what to

produce for the market when he

knows the costs and prices. This is the study of Production.

11. we want to know how the

national income or the total income

arising from what has been produced in the country (called the Gross Domestic Product or GDP) is

distributed through wages (and

salaries), profits and interest (We will leave aside here income from

international trade and investment).

This is study of Distribution.

or , Distribution refers to the economic activity which studies how income generated from the production process is distributed among the factors of production.

12. Modern economics has to

include some of the basic problems

facing the country for special studies.

For example, you might want to

know why or to what extent some

households in our society have the

capacity to earn much more than

others. 

**** You may want to know how

many people in the country are really poor, how many are middle-class, how many are relatively rich and so on. 

****You may want to know how many are illiterate, who will not get jobs,requiring education, how many are highly educated and will have the best job opportunities and so on. 

VVVI.

In other words, you may want to know more facts in terms of numbers that would answer questions about poverty and

disparity in society. 

13. VVI. - 

 “Economics is the study of how

people and society choose to

employ scarce resources that could

have alternative uses in order to

produce various commodities that

satisfy their wants and to

distribute them for consumption

among various persons and groups

in society.”

14. Statistics in Economics -

Data - The study that concerns the basic problems faced by a country, can be explained with the help of some economic facts in terms of numbers. Such economic facts are also known as data. (ALREADY WRITTEN IN THE CLASS)

Economic data measures the financial health or wellbeing of a country, specific regions, or individual markets. It is often presented in comparison with past measures. This data is used to power economic analysis and enrich other categories of financial data.

15. The purpose of collecting Economis data

is to understand and explain various causes behind some economic problems.

In other words,

at first we collect economic data in respect of some economic problems then we try to analyse them. 

For example,

when we analyse the hardships of

poverty, we try to explain it in terms

of the various factors such as unemployment, low productivity of people, backward technology, etc

16. Policies - After Analysing the economic problems we also try to find those measures that help solve an economic problem. In Economics, such measures are known as policies.

17 .The Relationship among Data, Analysing and Policies...

No analysis of a problem would be

possible without the availability of

data related to an economic problem and, that, in such a situation, no policies can be made to solve it.

i. Collection of Economic Data related to an economic problem to find the causes behind it

ii. Then this economic data is analysed 

iii. Then we know the reasons behind the economic problem.

iv. We take some steps to resolve it by make different policies regarding to this.

18. In our daily language the word

‘Statistics’ is used in two distinct

senses: singular and plural. 

In the plural sense, ‘statistics’ means

‘numerical facts systematically

collected’ as described by Oxford

Dictionary. 

Thus, the simple meaning of statistics in plural sense is data.

19. By data or statistics, we mean both quantitative and qualitative facts that are used in Economics. 

**** For example,

a statement in Economics like “the

production of rice in India has

increased from 39.58 million tonnes

in 1974–75 to 58.64 million tonnes in 1984–85”, is a quantitative fact. The numerical figures such as ‘39.58 million tonnes’ and ‘58.64 million tonnes’ are statistics of the

production of rice in India for

1974–75 and 1984–85 respectively.

 20. In addition to the quantitative

data, Economics also uses qualitative data. 

RARE - The chief characteristic of such information is that they describe

attributes of a single person or a group of persons that is important to record as accurately as possible even though they cannot be measured in quantitative terms. 

Take, for example,

“gender” that distinguishes a person

as man/woman or boy/girl. 

It is often possible (and useful) to state the information about an attribute of a person in terms of degrees (like better/

worse; sick/ healthy/ more healthy;

unskilled/ skilled/ highly skilled etc.).

21. Functions of Statistics -

i. By now, you know that Statistics is

an indispensable tool for an economist that helps him to understand an economic problem, Using its various

methods, effort is made to find the

causes behind it with the help of the

qualitative and the quantitative facts

of the economic problem. 

*** Once the causes of the problem are identified, it is easier to formulate certain policies to tackle it.

**** 

But there is more to Statistics. 

ii. It enables an economist to present economic facts in a precise and definite form that helps in proper comprehension of what is stated.

When economic facts are expressed in statistical terms, they become exact. Exact facts are more convincing than statements. 

For instance,

saying that with precise figures, 310

people died in the recent earthquake

in Kashmir, is more factual and, thus, a statistical data. Whereas, saying hundreds of people died, is not.

ii . Statistics also helps in condensing the mass of data into a few numerical measures (such as mean, variance

etc.

These numerical measures help

summarise data.

For example, it

would be impossible for a person to

remember the incomes of all the

people in a data if the number of

people is very large. Yet, one can

remember easily a summary figure like

the average income that is obtained

statistically. In this way, Statistics

summarises and presents a

meaningful overall information about a mass of data.

iii. Quite often, Statistics is used in

finding relationships between different economic factors - Price & Demand, demand and supply, Income and consumption etc. 

An economist may

be interested in finding out what

happens to the demand for a

commodity when its price increases

or decreases? 

Or, would the supply of

a commodity be affected by the

changes in its own price? 

Or, would the consumption expenditure increase

when the average income increases?

Or, what happens to the general price level when the government

expenditure increases.

The economist can do this only

by using statistical techniques.

iv. In another instance, the economist might be interested in predicting the changes in one economic factor due

to the changes in another factor. 

For

example, she/he might be interested

in knowing the impact of today’s

investment on the national income in future. Such an exercise cannot be undertaken without the knowledge of Statistics.

v. Today, we increasingly use Statistics to analyse serious economic problems

such as rising prices, growing

population, unemployment, poverty

etc., to find measures that can solve

such problems. Further it also helps

evaluate the impact of such policies

in solving the economic problems. For

example, it can be done easily using statistical techniques whether

the policy of family planning is

effective in checking the problem of

ever-growing population.

vi. In economic policies, Statistics

plays a vital role in decision making.

For example, in the present time of

rising global oil prices, it might be

necessary to decide how much oil

India should import in 2025. The

decision to import would depend on

the expected domestic production of

oil and the likely demand for oil in 2025. Without the use of Statistics, it cannot be determined what the

expected domestic production of oil

and the likely demand for oil would

be. Thus, the decision to import oil

cannot be made unless we know the

actual requirement of oil. This vital

information that help make the

decision to import oil can only be

obtained statistically.

Functions of Statistics in simple words -

Following are the functions of statistics :

I. Presentation of facts in figures :

Statistics presents the various facts and figures, in such a manner so that various complicated facts become easy, brief and concrete and they may be understood easily. In it, facts are presented through diagrams and graphs, which are useful to a common man also.

2. Establishment of relationship : With the help of statistical methods (correlation), relationship between two or more economic facts may be established. It may be find out that these facts have any relationship or not, what is the direction and degree of relationship between them etc.

3. Comparison : Two or more effects may be compared with the help of statistics. Various averages, rates, percentages and coefficients are used for this purpose.

4. Interpretation of problems : With the help of statistical devices, interpretation of various problems may be done. For example by collecting the data of unemployment among educated persons, the nature of employment problems among them may be interpreted.

5. Helpful in deciding the policy : With the help of statistics various policy decisions may be taken logically and successfully. For example price policy, export-import policy etc.

6. Formation of laws and principles of other sciences : Statistics helps to other social and natural sciences in forming the laws and with its help the various rules and principles of those sciences may be tested.

Statistics for Economics Introduction Very Short Answer Type Questions

Question 1.

What are economic goods?

Answer:

The goods which are made by humans are called economic goods.

Question 2.

Who is propagator of modern economics?

Answer:

The propagator of modem economics is Prof. Marshall.

Question 3.

Who is known as service provider?

Answer:

The person who works for others for remuneration is called service provider.

Question 4.

Who is known as service man?

Answer:

The person who keep others to do his work for remuneration is called service man.

Question 5.

What is economic activity?

Answer:

Activities which are performed to earn wealth are called economic activities.

Question 6.

What is economic interest?

Answer:

The problem of selection during the situation of scarcity is called economic interest.

Question 7.

Why are you not successful in fulfilling your own wants?

Answer:

Because we are having limited resources available compared to the resources required.

Question 8.

What is gross domestic product?

Answer:

That income which is received through production in the nation is called gross domestic product.

Question 9.

What are non – economic goods?

Answer:

Those goods which can be achieved without any labour and expenses is called non – economic

goods.

Question 10.

Which measures have been called as policy in economics?

Answer:

Those measures are called as policies in economics which helps in solving any economic problem.

Question 11.

Define economics in the words of Marshall?

Answer:

According to Marshall, “economics is the study of man in the ordinary business oflife.”

Question 12.

Define a consumer?

Answer:

A consumer is one who consumes goods and services for the satisfaction of his wants.

Question 13.

Define production?

Answer:

Production is the process of converting raw material into useful thing.

Question 14.

Define consumption?

Answer:

Consumption’s the process of using up utility value of goods and services for the direct satisfaction of

our wants.

Question 15.

Define distribution?

Answer:

Distributing national income as wages, rent, interest and profit is called distribution.

Question 16.

Define economics?

Answer:

Economics is the study of mankind in the ordinary business of life, it examines that part of individual

and social action which is mostly connected with attainment and with the use of the material

requisites of well being.

Question 17.

Define statistics in singular sense?

Answer:

It refers to techniques on methods relating to collection, classification, presentation analysis and

interpretation of quantitative data.

Question 18.

Define statistics in plural sense?

Answer:

Statistics refers to information in terms of numbers or numerical data such as: population, statistics,

employment statistics etc.

SHORT ANSWER TYPE QUESTIONS

1. What are your reasons for studying Economics?

Answer:

The basic,concern of economics is to allocate the scarce resources to the best possible use in order

to derive maximum benefit from the scarce resources. Due to the scarcity of resources having

alternative uses, an economy needs to allocate the scarce resources to the areas with maximum

possible and optimum returns. The following are the reasons that make the study of economics

important:

1. To study the Consumer behaviour:

The theory of consumer behaviour in Economics deals with the study of the behaviour of the

consumers in different types of market situations. This theory helps us understand how a rational

consumer makes his/her decisions to get the maximum possible satisfaction in the given income and

given prices of the goods and services.

2. To study the Production theory:

The theory of production studies the production decisions of the producers in different types of

market. The theory explains how a producer takes production decisions related to maximisation of

output in given cost or the minimisation of cost for a given level of output.

3. To study the Distribution of Income:

The study of Economics makes us aware about the distribution of national income. In other words, it

tells us how the income arising from the total production in an economy is distributed in the form of

wage, rent, interest and profit to different factor owners (like labour, land, capital and entrepreneur).

4. To study the Macroeconomic problems faced by an Economy:

Economics proves to be the most powerful tool to understand and analyse the root cause of basic

macroeconomic problems faced by an economy like poverty, unemployment, inflation, recession etc.

2. Write characteristics of statistics as numerical data?

Answer:

The main characteristics are as follows:

1. It is an aggregate of facts

2. It is expressed numerically.

3. It is affected by multiplicity of courses.

4. It is collected in a systematic manner.

5. Statistics may be collected by enumeration.

3. Distinguish statistics in singular and plural sense?

Answer:

The difference between statistics in singular and plural sense:

1. In singular sense it is statistically analytical while in plural sense it is statistically consequential.

2. In singular sense statistics is functional while in plural sense it is descriptive.

3. In singular sense facts are aggregated and analyzed to reach to a conclusion while in plural

sense it is aggregating facts.

4. Distinguish between ‘quantitative’ and ‘qualitative’ data with examples?

Answer:

The difference between Qualitative and Quantitative data:

Quantitative Data:

1. These refers to the data whose variables can be measured in numerical terms.

2. E.g., price of commodities, heights, weights of individual etc.

Qualitative Data:

1. These refers to the data whose variables cannot be measured in numerical terms.

2. Beauty of individuals, intelligence of individuals etc.

5. Discuss the role of statistics in economic planning?

Answer:

Statistics are used in economic planning for the following purposes:

1. Statistical data help us in comparing the rate of development of one country with the rate of

development of the other country.

2. The importance of consumption, production, distribution etc., can be known from available

statistical data.

3. The success that a plan achieves is measured best by the use of statistical meth¬ods.

4. Statistical datas are used for knowing about the progress in the techniques of production, volume

of production, imports, exports etc.

5. Planning involves fixation of targets and priorities. Targets which are fixed have to be achieved

within a specific period of time. It will be possible only when data are available.

6. Discuss the rule of statistics in economics?

Or

“The science of economic is becoming statistical in its method.” Explain?

Or

“Statistics are straw out of which any other economist have to make bricks.” Discuss?

Answer:

Statistics is useful in all the fields of economics viz., consumption, production, exchange, distribution

and public finance. There are a number of economic laws which are evolved by statistical analysis viz.,

Engel’s law of family expenditure, Malthus theory of population etc. Presentation of economics law

through diagrams, graphs etc., shows the application of statistical methods.

For finding out the solution of rising prices, growing population, unemployment, distribution of

national income etc. one has to rely heavily on statistical methods. Most of the policies of economics

would be in dark in the absence of appropriate statistical information. Statistical methods help not

only in formulating economic policies but also in evaluating their effect.

KEY NOTES IN THIS CHAP.

Economics is a science that studies human behavior which aims at allocation of scarce resources in

such a way that consumer can maximise their satisfaction, producers can maximise their profits and society can maximise its social welfare. It is about making choice in the presence of scarcity.

**** Scarcity means shortage of goods and resources in relation to their demand.

Scarcity is the root of all Economic problem.

Father of Economics Adam Smith provided wealth definition of economics( Book- The Wealth of

Nations, 1776):- Economics is an enquiry into the factors that determine the wealth of a country.

*** Scarcity definition given by Lionel Robbins(1932):- Economics is a science that studies human

behaviour as a relationship between ends and scarce means which have the alternative uses.

** Growth definition given by Paul A samuelson:- Economics is the study of how man and the society

chooses with or without the use of money, to employ scarce productive resources which could have

the alternative uses to provide various commodities overtime and distribute them for consumption

now and in future among various people and the groups of the society.

Resources are :

(a) Scarce / limited and

(b) Have alternatives uses

Types of Activities:

1. Economic Activities

a. Production

b. Consumption

c. Investment

d. Exchange

e. Distribution

2. Non-Economics Activities

a. Social

b. Religious

c. Political

d. Charitable

e. Parental

**** Economic activities are those activities which are related to earn money and wealth for life. These

activities generate new income and increase the flow of goods and services. For example production,

consumption, investment, distribution.

**** Non economic activities are those activities which are not related to earn money and wealth. These

activities neither generate income nor increase the flow of goods & services.For example a teacher

teaching his own son.

**** Consumer : Consumer is an economic agent who buys the goods and services to satisfy his wants.

Producer is one who produces goods and services for the generation of income.

Service holder : A person who is in job and gives his services as a factor of production and is getting

paid for it. E.g. Govt. Teacher.

Service Provider : A person who provides services to other for a payment. e.g. transporter, auto driver.

Statistics : Statistics is a method of taking decisions on the basis of numerical data.

Statistics can be defined in two ways:

1. Singular sense: Statistic Means Statistical methods and techniques related to collection,

organisation, classification, Presentation, analysis and Interpretation of data.

2. Plural Sense: Statistics means Numerical facts and figures Which have been systematically

collected for a definite purpose in any field of study.

Characteristics of statistics in plural sense

1. Aggregate of facts

2. Numerically expressed

3. Affected by multiplicity of causes

4. Reasonable accuracy

5. Collected in a systematic manner

6. Pre-determined Purpose

7. Placed in relation to each other

Stages of statistics in singular sense

1. Collection of data

2. Organisation of data

3. Presentation of data

4. Analysis of data

5. Interpretation of data

Statistical data

(1) Qualitative data – Not measured in numerical terms like beauty and intelligence.

(2) Quantitative data – Measured in numerical terms like price and Income.

Scope of Statistics

In the old days the use of statistics was restricted to deal with the affairs of the state. But now-a-days

the scope of statistics has spread to all those areas where numerical facts are used such as

economics, business industry, medicine, physics, chemistry and numerous other fields of knowledge.

Importance of Statistics in Economics

1. It enables an economist to present economic facts in precise and definite form.

2. Helps in condensing mass data info a few numerical measures.

3. Statistics is used in finding relationship between different economic factors.

4. Economics forecasting through statistical studies.

5. Helpful to formulate appropriate economic policies that solve economic problems.

6. Help to analyse the performance of policies applied before.

7. Economist try to find out cause and effect relationship between different sets of data.

8. Formulation of policies.

9. Used for inter-sectoral and inter-temporal comparisons.

10. It is a quantitative expression for economic problem.

Function of Statistics

1. Statistics simplifies complexities.

2. It expresses facts in numbers.

3.It presents data in condensed form.

4. Statistics compares different phenomena and reassures relationship between them.

5. Statistics is helpful in formation of policies.

6. Statistics is helpful in economic forecasting.

7. It facilitates comparisons.

8. It is useful in testing the laws of other sciences.

9. It helps in establishment of correlation between two facts.

Limitations of Statistics

1. Statistics does not study individuals.

2. Statistics results might lead to fallacious conclusions.

3. Statistics deals with quantitative facts only.

4. Statistics laws are true only on averages.

5. Only experts can make the best possible use of statistics.

6. Uniformity and homogeneity of data is essential.

7. Misuse of statistics is indeed its greatest limitation because misuse of statistics is possible.

8. Study of aggregates only

9. Without reference, results may prove to be wrong.

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*****

1. Make a list of activities that constitute the ordinary business of life. Are these economic

activities?

Answer

The activities that constitute the ordinary business of life are:

→ Buying of goods and services.

→ Rendering services to a company by employees and workers.

→ Selling of goods and services.

Yes, the above mentioned activities are regarded as economic activities as it involve the exchange of

money to earn livelihood.

Q2. ‘The Government and policy makers use statistical data to formulate suitable policies of

economic development’. Illustrate with two examples.

Answer

The statistical data is important for Government and policy makers to formulate suitable policies of

economic development. It not only helps in analysing and evaluate the outcomes of the past policies

but also assist them to take corrective measures and to formulate new policies accordingly. It is clear

from examples –

(i) It can be ascertained easily by using statistical techniques whether the policy of family planning is

effective in checking the problem of rapidly growing population.

(ii)  In preparing annual government budget, previous data of government expenditures and

government revenues are taken into consideration for estimating the allocation of funds among

various projects.

Q3. “You have unlimited wants and limited resources to satisfy them.” Explain by giving two

examples.

Answer

Every individual have unlimited wants but the resources for satisfying the wants are limited. Scarcity is

the root of all economic problems. Had there been no scarcity, there would have been no economic

problem. This can be understood by examples -

(i) A children pocket money is a limited so he/she have

to choose only those things that you want the most. You can’t purchase almost all the things you

wants.

(ii) A land available should be put in use either in agricultural or industrial. We can’t use same land for both activities.

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