Chapter 1 = Introduction

PART A
1. Define Economics:
Basic Definition: Same as Micro

Various definitions of economics developed; they are:

1. Wealth Definition: According to Adam Smith,
“Economics is the science of Wealth”. Wealth in
Economics means those goods which satisfy human
wants.
2. Welfare Definition: According to Alfred Marshall,
“Economics is the study of man in the ordinary course
of life”. It enquires how he gets his income and he use
it.
3. Scarcity Definition: According to Prof. Lionel
Robbins. “Economics is the science which studies
human behavior as a relationship between ends and
scarce means which have alternative uses”.
(Unlimited Wants~ Limited Resources ~Alternative
Uses).
4. Growth Definition: According to Prof. Sameulson,
“Economics is the study of how man and society
choose, with or without the use of money, to employ
scarce productive resources, which could have
alternative uses, to produce various commodities over
time and distribute them for consumption now and in
the future among various people and groups of
society”.

2. Economic and Non-Economic Activities:

 ➢ Economic Activities refers to those activities which
are undertaken to earn a living.
Every economy undertakes three main economic
activities:
1. Consumption: is an economic activity which deals
with the use of goods and services for the
satisfaction of human wants.
2. Production: refers to all activities which are
undertaken to produce goods and services for
generation of income and satisfaction of human
wants.
3. Distribution: is that economic activities which
studies how income generated is distributed among
the factors of production.
3. Reason for studying economics: SCARCITY +
GYAN (May be asked for 3 marks)
4. Service Holder: is a person who work for some other
person and gets paid for it in the form of wages and salary.
5. Service Provider: is a person who provides some kind
of services to the other for a payment.
PART B
1. Define Statistics?
- IN PLURAL SENSE: Means a collection of
numerical facts.
- IN SINGULAR SENSE: Deals with the collection,
presentation, analysis & interpretation (CPAI) of
the quantitative data.

2. Characteristics of Statistics?
(MT: A MAN’S RELATION)
1. A: Aggregate of Facts: single word/ number is not
statistics.
2. M: Affected by multiplicity of causes: Affected by
 multiple factors.
3. A: Statistics should be collected with a reasonable
standard of accuracy.
4. N: Statistics are numerically expressed.
5. S: Statistics are collected in a systematic manner.
6. Relation: Stats should be placed in relation to each
other – Comparable & Homogeneous data.

3. Functions of Statistics?
MT: CC—FF—H Planning (Rhythm hain..)
1. C: To simply complex facts- into simple and
understandable form.
2. C: To make comparison of facts- with various
statistical methods like avg rates, % etc.
3. F: To help in Forecasting
4. F: To present facts in definite form
5. H: Formulation and Testing of Hypothesis
6. Planning: To facilitate planning and policy
formulation

4. Importance of Statistics?
➢ Importance of Statistics to Govt.
o Formulation of Economic Laws
o Helps in understanding & solving an economic
problem.
o Price Analysis
➢ Importance of Statistics in Economics
o Formulation of Economic Laws
o Helps Understanding economic problem
o Study of Market Structures
➢ Importance of Statistics in Economic Planning
➢ Importance of Statistics in Business
 o Establishing a Business Unit
o Production Planning
o Estimating Demand for a product

5. Limitations of Statistics
(MT:
1. Does not deal with Individuals
2. Does not study Qualitative Phenomenon.
3. Statistical results are true only on averages
4. Statistical laws are not exact
5. Only experts make the best possible use of statistics

(Important Questions—Pg. 2.13 and 2.14)—May refer

NCERT Questions

Chapter 2: COLLECTION OF DATA

Statistics means data or questionnaire info. Capable of
some meaningful conclusion.
In collection of data, we will study:
1. Sources of data
2. Methods of Collecting data
Sources of Data:
1. Primary Sources: Implies collection of data from its
source of origin.
➢ Primary Data: data which is originally collected by
an investigator or agency for the first time for some
specific purpose.
2. Secondary Sources:
➢ Secondary Data: data which is not directly collected
 but rather obtained from the published or unpublished
sources.
Methods of Collecting Primary Data
1. Direct Personal Investigation: method by which data
are personally collected by the investigator from the
informants.
Merits: Originality, Reliable and Accurate, Flexibility,
Uniformity. (MT: ROFU)
Demerits: Expensive and Time Consuming, Wide Areas
(X), Costly

2. Indirect Oral Investigation: In this investigator

approach third parties, who are in the possession of
information about the subject of enquiry.
Merits: Wide coverage, Economical, Free from Bias
Demerits: Lack of Accuracy, Lack of Uniformity, Lack
of Accuracy

3. Information from Correspondents: In this method,

local agents or correspondents are appointed & trained to
collect the info. from the respondents.
Merits: Wide Coverage, Economy, Continuity (MT:
WEC)
Demerits: Lack of Uniformity, Time consuming, Lack of
Accuracy.

4. Mailing Questionnaire Method: In this method,

Questionnaire are mailed to informants, a covering letter
is attached with the questionnaire giving the purpose of
inquiry. It is also ensured that the info. will be kept
secret.
Suitability: Area of study is very wide. The informants
must be educated.
 Merits: Wide Coverage, Economy, Free from bias,
originality
Demerits: Less Accuracy, Lack of Interest, Limited
Scope

5. Enumerator’s Method: Under this method the

questionnaire is prepared according to the purpose of
enquiry. The enumerator himself approaches the
informants with the questionnaire. The Questionnaire
which are filled by the enumerator themselves by putting
questions are called schedules thus they are those persons
who help the investigator in collecting the data.
Suitability: Field of investigation is large, skilled &
specialized investigators needed.
Merits: Wide Coverage, Accuracy, Impartial
Demerits: Expensive, Time consuming, costly method
(MT: ETC)

CENSUS & SAMPLING INVESTIGATION

TECHNIQUES

1. Census Method: is that method in which data

collected from each and every element of the
population.
Suitability: Small size population | High Degree of
accuracy | Widely Diverse item in population
Merits: Reliability and Accuracy | Intensive Study |
Less Biased
Demerits: Expensive | Needs more time and
manpower| Not Suitable for large investigation.

2. Sampling Method: When only some representative

items of the population are selected & data collected
from these items are used for the analysis
Suitability: Size of population—Very large || High
degree of accuracy isn’t needed.
Merits: Economical | Greater Speed | Greater Scope|
Large Investigation
Demerits: Bias | Diff to achieve percent accuracy |
May not give importance to certain imp items.

(Differences are asked—Book 3.21)

METHODS OF SAMPLING

1. Random Sampling: In which each and every item

of the universe has equal chance of being selected in
the sample. Eg: Lottery
Merits:
o Free from personal bias
o Universe gets fairly represented by samples
o Straightforward method
Demerits
o Does not guarantee proportionate representation
of different items in the universe
o Does not give weight+ age to certain important
items in the universe.

A) Simple Random Sampling

Is one in which every item of the population
has an equal chance of being selected.
B) Stratified Sampling
Population is divided into different stratas
having different characters and some of the
items are selected form each startas so that
 entire population gets represented.
Merits
▪ Covers all characteristics
▪ Offers reliable and meaningful results
Demerits
▪ Limited Scope
▪ Possibility of biasness
C) Cluster Random Sampling
Under this method, total population is divided
into some recognisable sub- division, known as
clusters, a given number of clusters are chosen
at random and all the items covered by the
selected clusters are included in the sample.

2. Non- Random Sampling: Under this method, the

selection of the method depends on the judgement
of the investigators rather than on chance.
A) Quota Sampling: Under this method, the items
of the population are sub-divided into various
groups and then quota is fixed. But within the
Quota, the selection of sample units depends
upon the personal judgement of the investigator.
B) Convenience Sampling: Under this method,
while selecting the sample units, the investigator
gives special attention to this convenience.
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Shashank Saboo