The document presents an introduction to statistics and economics, covering fundamental concepts, definitions, and the economic problem related to resource scarcity. It explains the components of an economy, factors of production, and the importance of statistical methods in analyzing economic issues. Additionally, it emphasizes that while statistics is crucial for understanding economics, it should be interpreted with caution due to potential misinterpretations and biases.

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2. Introduction To Statistics
Class 11

3. Synopsis
1. Basic Terms
2. Definition of Economics
3. Ordinary Business Of Life
4. What Is Economic Problem
5. Why Economic Problem Arise
6. Economy And Its Components
7. Factors Of Production
8. Meaning Of Statistics
9. Scope Of Statistics
10. Importance Of Statistics In Economics
11. Statistics Methods Are No Substitute For Common Sense

4. Basic Terms
1. Consumer – A person who purchases goods and services for personal use.
2. Producer – A person who produces goods. Example: Manufacturer.
3. Seller – A person who sells goods/services to make a profit. Example: Shopkeeper.
4. Saving – A part of the income which is not consumed.
5.Investment – An investment is the purchase of goods that are not consumed
today but are used in the future to create wealth.
6. Service Holder – A person who is in job to earn wages or salary.
7. Service Provider – A person who provides services for a payment.
8. Economic Activities – Any activity undertaken for a monetary gain.

5. Definition Of Economics
Alfred Marshall a great
propounder of Modern
Economics defines
economics as
“the study of
mankind in the
ordinary business
of life.”

6. Definition Of Economics
“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.”

7. Ordinary Business Of Life
Economics is a study of mankind in
the ordinary business of life.
Individual and social life actions
which are closely connected with
the use of the material
requirement.
Any activity undertaken for
monetary purpose is termed by
economists as ordinary business of
life.

8. What Is Economic Problems
Economic Problems are the problems of choice, or of
allocating scarce resources to other uses due to scarcity
of resources. These resources have alternative uses,
which is why the problem of choice arises.

9. Why Economic Problem Arise
Human wants are unlimited, but the resources to
satisfy those wants are limited and these resources
have alternative uses.
Resource Scarcity gives rise to the problem of choice
among consumer and they make rational choice to
satisfy their demand.

10. Economy And Its Components
A system in which people get a living to satisfy their
wants through the processes of Production,
Consumption, Investment and Exchange. It has four
components:
1. Production: It is defined as ‘creation of utility’. It is
the process in which inputs are transformed to
goods or services.
2. Consumption: It is defined as ‘usage of
goods/services’. It is the process by which a good or
a service is completely used up.

11. Economy And Its Components
3. Investment: It is a part of production which is
committed for future income.
4. Distribution: It is a part of production which explains
how the national income is distributed among different
factors of production.

12. Factors Of Production
There are four factors of production:
1. Land: Part of the income goes to the owner of land
in the form of rent
2. Labour: Part of the income goes to the labourers for
their services in the form of wages
3. Capital: Part of the income goes to the owner of
capital in the form of interest
4. Entrepreneur: Part of the income goes to
entrepreneurs in the form of profits

13. Meaning Of Statistics
Statistics is the quantitative information of facts and
findings.
In singular sense:
“Statistics may be defined as the collection,
organisation, presentation, analysis and interpretation
of data” {CO-PAI}
In plural sense:
Statistics refers to information in terms of numbers or
numerical data such as population statistics.

14. Scope Of Statistics
1. In Planning: Planning is the combination of vision,
goals, objectives, strategies, policies, etc. Statistics
helps to get the necessary information about the
planning which depends upon the analysis of
statistical data.
2. In Economics: Statistical Analysis are used in solving
different economic problems such as consumptions,
production, distribution, investment, unemployment,
etc. Tools like Time Series Analysis, Demand Analysis,
Forecasting Techniques, etc are used.

15. Scope Of Statistics
3. In Business: Statistics help businesses to test and
make correct decisions about the location of the
business, marketing the product, financial resources,
etc, based on the statistical information.
4. In State Management: In order to set different
policies to run an economy efficiently and allocating
economy resources in various sectors based on
different statistical tools.

16. Scope Of Statistics
5. In Research Activities: Statistical techniques are used
for collecting information during research and also for
analysis and interpretation of research findings.
6. In Administration: It is being widely used to
formulate and forecast different plans and policies of
the state administration.

17. Statistics has emerged as a lifeline of economics.
1.Quantifying economic problem: For example,
unemployment is said to be 20% of India’s working
population.
2.Inter- Sectoral Comparisons: For example, looking
after the impact of unemployment in different sectors
such as: rural or urban sector.
Importance Of Statistics In Economics

18. Importance Of Statistics In Economics
3. Cause and Effect Relationship: For example, the
cause of unemployment and its effect on market,
inflation rate or on the economy’s growth.
4. Formulating Policies: For example, in order to set the
budget for the economy which helps in Fiscal policy.
5. Economic Equilibrium: For example, in order to
ensure equilibrium between market demand and
market supply.

19. 6. Constructing Economic Theories: For example, we
use statistics in Consumer Theory of Demand and
Producer Theory of Supply, etc.
Importance Of Statistics In Economics

20. Statistics Methods Are No Substitute For
Common Sense
• Statistical data may be misinterpreted.
• Statistical data may be politically influenced.
• Statistical data may involve personal bias.
• Statistical data may be manipulated.
• Statistical data may fail to reveal the errors
committed.
Therefore, students are advised to use their common
sense while working with the statistical data.

21. Thank You!
Lesson by
Sanjay Thakran
PGT Maths, Economics
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