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CLASS 11TH COMMERCE ECONOMICS STATISTICS INTRODUCTION TO STATISTICS PART-II

Important Questions

Multiple Choice questions-

Question 1. Arthashashtra originated in:
(a) 17th century
(b) 18th century
(c) 19th century
(d) None of the above.

Question 2. “Economics is the study of economic welfare” who said this:
(a) Marshall
(b) Prof. Pigou
(c) J. K. Mehta
(d) Keynes.

Question 3. He is known as father of statistics:
(a) Bowley
(b) Bodington
(c) Gottfried Achenwall
(d) None of these.

Question 4. Statistics is:
(a) Facts
(b) Presentation
(c) Numerical data
(d) None of these.

Question 5. Name of the book by Kautilya:
(a) Economics
(b) Varta
(c) Krishna, Valmiki and Vashista
(d) None of these.

Fill in the blanks:

1. Adam Smith is known as …………………………. of Economics.
2. There is difference between wants and …………………………..
3. Collection is an example of ……………………….
Statistics is an art as well as ………………………..
5. When six economists gather they have …………………………. opinion.

State true or false:

1. There are limited wants of humans.
2. “Principles of Economics” is written by Pigou.
3. Statistical data is numerical data.
4. Statistics is not important in speculation market.
5. Rules of economics are universal.

Match the columns:

Very Short Questions:

1. According to Marshall, Economics is what type of science?
2. Who wrote the book, “Discovery of Nation’s Wealth and Reasons”?
3. What is statistics in singular?
4. Who gave analytical definition of economics?
5. From which language statistics has been derived?
6. What are economic goods?
7. Who is propagator of modern economics?
8. Who is known as service provider?
9. Who is known as service man?
10. What is economic activity?

Short Questions:

Question 1 Define statistics.
Question 2 What are the stages of statistical study?
Question 3 What are the tools used, related to statistical study?
Question 4 What are the scopes of statistics?
Question 5 Define statistics as a singular noun.
Question 6 Define statistics as a plural noun.
Question 7 What is inferential statistics?
Question 8 What are the two components of the subject matter in statistics?
Question 9 What are the three components of economics?
Question 10 What is descriptive statistics?

Long Questions:

1.    What is Economic Activity?
2.    What is statistics?
3.    What are Statistical Tools?
4.    Subject Matter of Statistics?
5. Limitations of Statistics
6. What Causes Distrust?

1.    (b) 18th century
2.    (a) Marshall
3.    (b) Bodington
4.    (b) Presentation
5   (a) Economics

Fill in the blanks:

6.    Father
7.    Intensity
8   Statistics
9.    Science
10.    7

State true or false:

1.    False
2.    False
3.    True
4.    False
5.    False

Match the columns:

1.    Social
3.    Rules
4.    Robbins
5.    English
6.    The goods which are made by humans are called economic goods.
7   The propagator of modem economics is Prof. Marshall.
8.    The person who works for others for remuneration is called service provider.
9.    The person who keep others to do his work for remuneration is called service man.
10   Activities which are performed to earn wealth are called economic activities.

Ans 1. Statistics can be defined as the collection, presentation, classification, analysis, and
interpretation of quantitative data.

Ans 2. The stages of a statistical study are:
•    Collection of data
Organisation of data
Presentation of data
Analysis of data
Interpretation of data
Ans 5. The tools used, related to statistical study are:
•    Census or sample technique
Tally bar and assembling of data
Graphs, tables, and diagrams
Average, percentages, regression coefficient, and correlation
Average and the degree of relation, percentage, and relation between degree variables
Ans 4. The scopes of statistics include:
•    Nature of statistics
•    Subject matter of statistics
Limitation of statistics
Ans 5. In the singular sense, statistics means the science of statistics or statistical methods. It refers to
the techniques or methods relating to the analysis, collection, presentation, classification, and
interpretation of quantitative data.

Ans 6. In the plural sense, statistics is defined as the information in terms of numerical data or numbers
such as employment statistics, statistics concerning public expenditure, population statistics, etc.

Ans 7. Inferential statistics refers to the methods by which conclusions are drawn relating to the
universe based on a given sample.

Ans 8. The two components of the subject matter in statistics are:
Descriptive statistics
Inferential statistics

Ans 9.The three components of economics are consumption, production, and distribution.

Ans 10.Descriptive statistics refers to those methods which are used for the collection, presentation as
well as analysis of data. These methods relate to such estimations as a measurement of central tendencies,
measurement of dispersion, measurement of correlation, etc.

Ans 1. It is an activity which is related to the use of scarce means (also called scarce resources).

Means are always scarce in relation to our wants. Imagine yourself as the richest person on the earth. Still
you can’t have everything you wish to have at a point of time. It implies the scarcity of your means/
resources in relation to your wants.

Engaged in diverse economic activities, we are performing ‘ordinary business of life’, according to
Alfred Marshall, a great pro founder of Modern Economics. Thus, he defines economics as “the study
of mankind in the ordinary business of life.”

Scarcity is the Undercurrent of Economic Problem and therefore of Economics

Resources are always scarce in relation to our wants. Also, resources have alternative uses: A ten-rupee note
in your pocket may be spent on a cup of coffee or a cold drink. Likewise, a worker may render his services in
factory A, rather than B and C. Because, resources are scarce and have alternative uses, we cannot escape from
the problem of allocation of limited means to alternative uses. This is what we call economic problem or the
problem of choice.

Ans 2. Even to a layman this should not be a difficult question. If asked to define Statistics, we can expect a
layman to say that Statistics is something like a store of quantitative information. Yes, it is true. Statistics
means quantitative information or quantification of the facts and findings. But, how do we get quantitative
information? There must be a system, method or technique to collect quantitative information. Also, statistical
information may be a raw information. It needs to be classified, tabulated or it needs to be systematically
presented. One must learn the system of presentation and classification of data. Also, there must be a set
of methods and techniques to condense the data. May be, we find averages or percentages. And above all,
there must be a set of methods or techniques on the analysis and interpretation of quantitative information.
A student of economics has to study all these methods and techniques to understand and master the
subject matter of Statistics.

Thus, unlike a layman, a student of economics cannot relax taking Statistics just as a pool of quantitative
information. Instead he is also to look into the methods or techniques relating to its collection, classification,
presentation, analysis as well as interpretation.

In view of such a vastness of the subject matter, Statistics is defined both in singular sense and plural sense, as under:

Statistics—A Plural Noun

In its plural sense, Statistics refers to information in terms of numbers or numerical data, such as Population Statistics,
Employment Statistics, Statistics concerning Public Expenditure, etc. However, any numerical information is not Statistics.
Example: Ram gets Rs. 100 per month as pocket allowance is not Statistics (it is neither an aggregate nor an average)
whereas average pocket allowance of the students of Class X is Rs. 100 per month, or there are 80 students in Class XI
compared to just 8 in Class XII of your school are Statistics.

The following table shows a set of data which is Statistics, and another set which is not Statistics. The
figures used are hypothetical.

Ans 3. These refer to the methods or techniques used for the collection, organisation and presentation of data, as
well as for the analysis and interpretation of data.
Stages of Statistical Study and the Related Statistical Tools

Ans 4. Subject Matter of Statistics

Subject matter of statistics includes two components: Descriptive Statistics and Inferential Statistics.

The Concept of Universe or Population

It should be interesting for the students of Clsss XI to note that the concept of universe or population has a
specific meaning in Statistics. It refers to the aggregate of all items or units relating to your statistical
study. Example:

Universe or population size is 1,000 if you are studying 1,000 students for your statistical study.

(1) Descriptive Statistics: Descriptive Statistics refers to those methods which are used for the collection,
presentation as well as analysis of data. These methods relate to such estimations as ‘measurement of
central tendencies’ (average mean, median, mode), ‘measurement of dispersion’ (mean deviation, standard
deviation, etc.), ‘measurement of correlation’, etc. Example: Descriptive statistics is used when you estimate
average height of the secondary students in your school. Likewise, descriptive statistics is used when you
find that marks in science and mathematics of the students in all classes are intimately related to each other.

(2) Inferential Statistics: Inferential Statistics refers to all such methods by which conclusions are drawn relating
to the universe or population on the basis of a given sample. (In Statistics, the term universe or population refers
to the aggregate of all items or units relating to any subject.) For example, if your class teacher estimates average
weight of the entire class (called universe or population) on the basis of average weight of only a sample of students
of the class, he is using inferential statistics.

Ans 5.In modern times. Statistics has emerged to be of crucial significance in all walks of life. However, it has certain
limitations. Thus, writes Newshome that, “Statistics must be regarded as an instrument of research of great value but
barring severe limitations which are not possible to overcome.” Following are some notable limitations of Statistics:

(1) Study of Numerical Facts only: Statistics studies only such facts as can be expressed in numerical terms, it does
not study qualitative phenomena like honesty, friendship, wisdom, health, patriotism, justice, etc.

(2) Study of Aggregates only: Statistics studies only the aggregates of quantitative facts. It does not study
statistical facts relating to any particular unit. Example: It may be a statistical fact that your class teacher
earns Rs. 50,000 per month. But, as this fact relates to an individual, it is not to be deemed as a subject
matter of Statistics. However, it becomes a subject matter of Statistics if we study income of school teachers
across all parts of the country, for purpose of finding regional differences in income.

(3) Homogeneity of Data, an essential Requirement: To compare data, it is essential that statistics are
uniform in quality. Data of diverse qualities and kinds cannot be compared. For example, production
of food grains cannot be compared with the production of cloth. It is because cloth is measured in
meters and food grains in tonnes. Nevertheless, it is possible to compare their value instead of the volume.

(4) Results are True only on an Average: Most statistical findings are true only as averages. They express
only the broad tendencies. Unlike the laws of natural sciences, statistical observations are not error-free.
They are not always valid under all conditions. For instance, if it is said that per capita income in India is
Rs. 50,000 per annum, it does not mean that the income of each and every Indian is Rs. 50,000 per annum.
Some may have more and some may have less,

(5) Without Reference, Results may Prove to be Wrong: In order to understand the conclusions precisely, it
is necessary that the circumstances and conditions under which these conclusions have been drawn are also
studied. Otherwise, they may prove to be wrong.

(6) Can be used only by the Experts: Statistics can be used only by those persons who have special knowledge
of statistical methods. Those who are ignorant about these methods cannot make sensible use of statistics. It
can, therefore, be said that data in the hands of an unqualified person is like a medicine in the hands of a quack
who may abuse it, leading to disastrous consequences. In the words of Yule and Kendall, “Statistical methods
are most dangerous tools in the hands of an inexpert.”

(7) Prone to Misuse: Misuse of Statistics is very common. Statistics may used to support a pre-drawn conclusion
even when it is absolutely false. It is usually said, “Statistics are like clay by which you can make a god or a devil,
as you please.” Misuse of statistics is indeed its greatest limitation.

Ans 6. Distrust of Statistics arises not because there is anything wrong with Statistics as a subject matter. It arises
because the users of Statistics tend to manipulate it to suit or support their pre-drawn conclusions or observations.
Main causes for the distrust of Statistics are as under:

(i) Different kinds of Statistics are obtained in respect of a given problem.

(ii) Statistics can be altered to match the predetermined conclusions.

(iii) Authentic Statistics can also be presented in such a manner as to confuse the reader.

(iv) When Statistics are collected in a partial manner, the results are generally wrong. Consequently,
people lose faith in them.

However, it may be noted that if Statistics are presented wrongly, then the fault does not lie with Statistics
as a subject matter. The fault lies with those people who collect wrong Statistics or those who draw wrong
conclusions. Statistics, as such, do not prove anything. They are simply tools in the hands of the statisticians.
If a statistician misuses the data, then the blame lies squarely on him and not on the subject matter, A
competent doctor can cure a disease by making good use of the medicine but the same medicine in the
hands of an incompetent doctor becomes a poison. The fault in this case is not of the medicine but of the
unqualified doctor. In the same way, Statistics is never faulty but the fault lies with the users.

In fact, Statistics should not be relied upon blindly nor distrusted outright. “Statistics should not be used as
a blind man uses a lamp post for support rather than for illumination, whereas its real purpose is to serve
as illumination and not as a support.”

In making use of Statistics one should be cautious and vigilant. In the words of King, “The science of
Statistics is the most useful servant, but only of great value to those who understand its proper use.”

It is the duty of the students of economics to make use of know-how of Statistics to discover the truth rather than to cover the truth.