Revison Notes

MY REVISION NOTES:--
CHAPTER-1, INTRODUCTION
Economics is a science that studies human behavior, which aims at allocation of scarce
resources in such a way that consumer can maximize their satisfaction, producers can
maximize their profits, and society can maximize 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 problems.
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 behavior as a relationship between ends and scarce means which have the
alternative uses.
Growth Definition given by Paul A. Sandelson. Economics is the study of how, when, 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 over time
and distribute them for consumption now and in future among various people and the groups
of the society.
Resources are :
1. Scarce / Limited
2. Have alternative uses
Types of activities :
Economic :
● Production
● Consumption
● Investment
● Exchange
● Distribution
Non economic:
● Social
● Religious
● Political
● Charitable
● 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 and
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.
Producers:- Producers is one who produces goods and services for 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. Example, Government Teacher
Service Provider:- A person who provides service to other for a payment. Example,
Transporter, Auto Driver
Statistics:- Statistics is a method of taking decisions on the basis of numerical data.
Statistics can be defined in two ways:-

● First, singular sense:- Statistics means statistical methods and techniques related
to collection, organization, classification, presentation, analysis, and interpretation of
data.
● 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. Numerical expressed.
3. Affected by multiplicity of causes.
4. Reasonable accuracy.
5. Collected in a systematic manner.
6. Pre-determined purpose.
7. Placed in a relation to each other.
Stages of statistical 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:-
● Qualitative data:- not measured in numerical terms like beauty and intelligence.
● 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
nowadays, 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 helps an economist to present economic facts in precise and definite form.
2. Helps in condensing mass data into 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 analyze the performance of policies applied before.
7. Economists 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 problems.
Functions 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 science
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, result may prove to be wrong.

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MY REVISION NOTES:--

Father of Economics, Adam Smith provided Wealth Definition of Economics

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

Statistics can be defined in two ways:-

Characteristics of statistics in plural sense:-

Stages of statistical in singular sense:-

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