Chapter 1 Introduction Eco 11

Chapter 1 Introduction
Q1. Define Economics.

Ans: Economics is the science that studies human behaviour 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.
Q2. Who is known as the father of Economics?

Ans: Adam Smith
Q3. Define Scarcity.

Ans: Scarcity means shortage of goods and resources in relation to their demand.
Q4. Define Statistics.

Ans: 1. Statistics: Statistics can be defined in two senses-
(a) In plural sense: Statistics means Numerical facts and figures which have been
systematically collected for a definite purpose in any field of study. For example
statistics of births, statistics of plants, statistics of students, statistics of imports and
exports etc.
(b) In singular sense: Statistics is the subject that deals with the collection, organisation,
presentation, analysis and interpretation of data.
Q5. What are the stages in statistical investigation?

Ans: The common stages or steps in any statistical investigation are:
(1) Collection of data: The process of collecting and arranging important information
from a particular sample or population is known as collection of data. There are two
methods of data collection- Primary data and Secondary data.
(2) Organization of data: It means summarization of data in some meaningful way, e.g.
tabular form.
(3) Presentation of the data: The process of re-organization, classification, compilation,
and summarization of data to present it in a meaningful form.
(4) Analysis of data: The process of extracting relevant information from the summarized
data, mainly through the use of elementary mathematical operation.
Q6. What is statistical data?

Ans: Statistical data are of two types-
(1) Qualitative data – Qualitative data are those which are not measured in numerical
terms like beauty and intelligence.
(2) Quantitative data – These data are measured in numerical terms like price and income.
Q7. State the importance of Statistics.

Ans: Importance of statistics in economics are –
1) It enables an economist to present economics facts in precise and definite form.
2) Statistics is used in finding relationship between different economic factors.
3) Helpful to formulate appropriate economic policies that solve economic problems.
4) It is a quantitative expression for economic problem.
Q8. What are the function of statistics?
Ans: The functions of statistics are –
1) Statistics simplifies complexities.
2) It expresses facts in numbers.
3) It presents data in condensed form.
4) Statistics is helpful in economic forecasting.
Q9. What are the limitations of statistics?

Ans: 1. Statistics does not study individuals.
2. Statistics deals with quantitative facts only.
3. Statistics laws are true only on averages.
4. Study of aggregates only.
Q10. Define the following.

1. Producer – Producer is one who produces goods and services for the generation of
income.
2. Consumer – A consumer or a customer is characterised as an individual who purchases

goods and services to satisfy his wants.
3. Employee – An employee is a person who gets compensation in the form of salary or

wages for their services rendered to the employer.
4. Employer – An employer is a person or an organisation that employs one or more people

to produce goods or services by providing them with compensation in the form of salary or
wages in return for work done by them.
5. Economic Activity – 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.
6. Seller – The term seller alludes to a party that offers a service, an asset, or a product as a
trade-off for payment. A seller can be an individual, enterprise, government, or any other
entity.
7. Economic Data – Economic data measures the well-being and financial health of
individual markets, specific markets, specific regions, or a country. The data presented can
usually be of the present compared with the past data. Economic data is used to influence
monetary examination and advance other categories of monetary information or data.
8. 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.
9. Service provider – A person who provides services to other for a payment. E.g.
Transporter, Auto driver

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Chapter 1 Introduction

Q1. Define Economics.

Q2. Who is known as the father of Economics?

Q3. Define Scarcity.

Q4. Define Statistics.

Q5. What are the stages in statistical investigation?

Q6. What is statistical data?

Q7. State the importance of Statistics.

Q9. What are the limitations of statistics?

Q10. Define the following.

2. Consumer – A consumer or a customer is characterised as an individual who purchases

3. Employee – An employee is a person who gets compensation in the form of salary or

4. Employer – An employer is a person or an organisation that employs one or more people

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