CH 1

Meaning of Statistics
In singular sense, statistics refers to statistical methods. These are:
• Collection of data
• Organization of data
• Presentation of data
• Analysis of data
• Interpretation of data
In a Plural sense, statistics means aggregates of facts (Data) greatly affected by multiplicity
of causes, numerically expressed, collected systematically for a pre-determined purpose.
Characteristics of Statistics in Plural Sense:
• Statistics are an aggregate of facts.
• Statistics are greatly affected by multiplicity of causes.
• Statistics are numerically expressed.
• Statistics are enumerated or estimated according to a reasonable standard of accuracy.
• Statistics are collected systematically.
• Statistics are collected for a pre-determined purpose.
• Statistics should be placed in relation to each other i.e. they can be used for comparisons
Functions of Statistics
• Helps in understanding economic problems by using various statistical methods like
mean, median, graphs etc.
• Helps in the presenting facts in definite form for example, a statement like population is
growing at a rate of 1.5% annually is more convincing than simply stating that population is
increasing.
• Statistics helps in condensing mass data into a few numerical measures.
• Establishes relation between factors.
• Helps in the formulation of plans and policies for solving economic problem of
businessmen as well as government.
• Helps in inter-sectoral and inter-temporal comparisons i.e. comparison across different
sectors and also, across different time periods.
Importance of Statistics
• Statistics is useful in Economics (consumption, production, and distribution)
Consumption data is helpful in planning the consumer’s budget.
The data regarding production activity is particularly helpful in making adjustments in
demand and supply and deciding quantity of production.
Statistical methods are used to solve the problem of distribution of income among various
factors of production in an economy.
• Statistics is useful in economic planning
Economic planning involves growth targets. Use of statistical methods help in evaluating the
various stages of economic planning.
• Statistics is useful in business
Businessmen use market research based on statistics to estimate market demand for their
product. Details of transaction also is done using statistical tools
• Statistics is useful in administration and governance
Government often uses data related to poverty, unemployment, per capita income etc. to
start implement various public welfare programmes and schemes.
Scope of Statistics
Scope of Statistics can be classified as:
1. Statistical methods 2. Applied statistics
• Collection of data • Descriptive
• Organization of data • Scientific
• Presentation of data
• Analysis of data
• Interpretation of data
Quantitative and Qualitative data
Quantitative data are data represented numerically, including anything that can be counted,
measured, or given a numerical value. Examples of quantitative data can be Revenue in
dollars, Weight in kilograms, Age in months or years etc.
Qualitative data is a type of data that describes characteristics or qualities, and is often non-
numerical. It can be collected through interviews, surveys, observations, focus groups, and
other methods.
MULTIPLE CHOICE QUESTIONS (1 MARK)
1 Which of the following statements can be considered as Statistics?
a) Marks code by Saumya was 14% higher than Manish
b) The profit of company a is rupees 25 crores
c) The life expectancy in India is 72 years
d) The manufacturing cost of a refrigerator is 35000
2 Identify the statement that is not false.
a) Statistics may or may not be numerically expressed b) Statistics are true only on an
average
c) Statistical tools used for presentation of data d) Statistics studies individual units
3 Which out of the following is not an example of quantitative data?
a) Height b) Weight c) Marks d) Creativity
4 Shailja submitted a school project on the growth of the telecommunication industry in India.
She follows the steps listed below. Arrange the steps in logical order:
i. Using average and correlation coefficients to analyse numerical information
ii. Collection of data about market share and revenue of various telecom service providers
iii. Organization of data in proper sequence
iv. Presentation of data in the form of tables diagrams and graph
v. Interpretation of data by determining the degree of relationship between various economic
variables expressed
a) i , iii, v, ii, iv b) i , iv, v, ii, iii
c) ii , iii, iv, v, i d) iii, iv, v, i, iii
5 Identify the economic agent who uses goods and services for the satisfaction of human
wants:
a) Producer b) Seller
c) Consumer d) Investor
ASSERTION REASON BASED QUESTION: Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
(A)
b) Assertion (A) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the
correct explanation of Assertion (A).
c) Assertion (A) is true, but Reason (R) is false.
d) Assertion (A) is false, but Reason (R) is true.
6. Assertion (A)-Statistical results at true only on an average.
Reason (R) – Like laws of natural sciences statistical results are exactly valid in all
situations.
7 Assertion (A) -Economic problems involve the problem of making choices
Reason (R) -It arises because of never-ending wants and their alternative uses.

STATEMENT-BASED BASES QUESTIONS-Alternatives:

a) Statement 1 is true and statement 2 is false. b) Statement 2 is true and statement 1 is
false. c) Both the statements are true d) Both the statements are false
8. Statement 1: Scarcity is the root cause of all economic problems.
Statement 2: Human wants are limited.
9 Statement 1: Economic activities involve earning of money.
Statement 2: In the plural sense, statistics deals with the collection organization presentation
interpretation, and analysis of data.
SHORT - ANSWER QUESTIONS 3 / 4 MARKS
12 “Statistics is the hub of the wheel of Economics”. In light of this statement, briefly explain
the functions of statistics
Ans-Functions of statistics
Statistics helps in simplifying complex data by using various statistical methods
• It presents economic facts in a precise and definite form
• It helps in making comparisons it is used to study the relationship between various
economic variables like demand and supply etc.
• It helps in formulating economic plans and policies.
13 Statistics are numerical facts but all numerical facts are not statistics. Do you agree?
Support your answer with a suitable example.
Ans. I agree with the given statement. Statistics are figures but all figures or numerical facts
are not statistics.
For example: Saanvi has scored 25 marks in Economics is not statistics whereas the
statement-average marks secured by students is 32 will be considered as statistics since it
involves average.
14 The three conventional divisions of the study of Economics comprise the study of
consumption production and distribution. Based on your understanding, explain the meaning
of the following terms:
a. Consumption b. Production c. Distribution
Ans: Consumption -Process of using various goods and services to satisfy human wants
Production- Process of converting inputs into output (goods and services)
Distribution - Division of national income into factor incomes like wages, rent, interest, and
profit.
15 Using examples explain the meaning of quantitative and qualitative data.
Ans. Quantitative data -Data that can be measured in numerical terms like temperature
height weight etc.
Qualitative data - Data that cannot be measured directly in numerical terms like sincerity
learning skills intelligence etc.
16 With the help of an example explain how the government and the policymakers use
statistical data to formulate suitable policies for economic development.
Ans. Today Statistics is increasingly being used to study various economic problems like
inflation, poverty, unemployment, etc, and to find ways to solve them. For example, the
Government and policymakers may decide to hike tax rates applicable to high-income
groups (progressive taxation policy) to reduce economic disparity in India.
17 Read the given text carefully and answer the question that follows:
Descriptive and inferential statistics are two fundamental branches of statistical analysis.
Descriptive statistics focus on summarizing and describing data through measures like
averages, percentages, and graphical representations. They provide a clear and concise
snapshot of the main features of a dataset, such as its central tendency and variability. For
example, mean and standard deviation are descriptive statistics used to understand the
average and spread of data points in a dataset. In contrast, inferential statistics involve
making predictions, generalizations, or conclusions about a population based on a sample of
data. This branch utilizes probability theory and hypothesis testing to
draw inferences about the larger population from which the sample is drawn. For instance,
inferential statistics can help determine if a new drug is effective based on results from a
clinical trial sample. It allows researchers and analysts to go beyond the specific data they
have and make educated guesses or assertions about broader trends or phenomena.
Together, descriptive and inferential statistics form the backbone of statistical analysis,
providing tools for both summarizing data to understand its characteristics and making
educated predictions or decisions based on that data.
a) —---------------------statistics is used to summarize and describe the main features of a
dataset.
b) Give three points of difference between descriptive statistics and inferential statistics.
Ans a) Descriptive
b) The three basic differences are:
1) Scope: Descriptive statistics summarizes and describes data within a dataset,
while inferential statistics conclude populations based on sample data.
2) Methods: Descriptive statistics use measures like averages and graphical
representations to present data. Inferential statistics involve hypothesis testing,
confidence intervals, and probability theory.
3) Application: Descriptive statistics are the basics for understanding data
characteristics, whereas inferential statistics are crucial for making predictions
and decisions based on data analysis
18 Read the given text carefully and answer the question that follows:
The origin of statistics can be traced back to ancient civilizations, where rudimentary forms
of data collection and analysis were utilized for administrative, economic, and social
purposes. Early records suggest that the ancient Egyptians, Babylonians, and Chinese
employed basic counting and recording techniques to manage resources, assess taxes, and
predict natural events. In ancient Greece, scholars like Hippocrates used statistical methods
to study disease patterns and mortality rates. The term "statistics" itself derives from the
Latin word "status," meaning political state or condition, reflecting its early applications in
governance and statecraft. The development of probability theory in the 17th century by
mathematicians like Blaise Pascal and Pierre de Fermat laid the foundation for more
rigorous statistical methods. Later, in the 19th and 20th centuries, pioneers such as Karl
Pearson and Sir Ronald Fisher contributed significantly to the formalization of statistical
theory and its application across diverse disciplines, solidifying statistics as a cornerstone of
modern scientific inquiry and decision-making. Today, statistics continues to evolve with
advances in computing and data science, playing an indispensable role in understanding
and navigating the complexities of our interconnected world.
a) Various methods of statistics were used in Greece to study —------------and —--------------.
b) In what way does Statistics continue to evolve today?
Ans a) Disease patterns and mortality rates.
b) Advancement in computing and data science is helping in the evolution of Statistics in the
present times, thereby playing an indispensable role in understanding and navigating the
complexities of our interconnected world.
ANSWERS TO MCQs
1. a) Marks code by Saumya was 14% higher than Manish 7. a)
2. b) Statistics are true only on an average 8. b)
3. d) Creativity 9. a)
4. c) ii, iii, iv, v, i
5. c) Consumer
6. c) Assertion (A) is true, but Reason (R) is false.