UNIT 1 - INTRODUCTION

GIST OF THE LESSON:

MEANING OF ECONOMICS: Economics is about making choice in the
presence of scarcity.
According to L. Robbins -Economics is the science which studies human
behaviour as a relationship between ends and scarce means which have
alternative uses.
Economic activity – Activities undertaken for monetary gain or to earn
income.
COMPONENTS OF ECONOMICS --- three parts of economics are
a] Consumption b] Production c] Distribution
Consumption: In consumption, we study wants, their origin, nature and
characteristics and the laws governing them.
Production: It refers to all activities which are undertaken to produce goods
and services for generation of income and satisfaction of wants.
Distribution: Economic activity which studies how income generated from
the production process is distributed among the factors of production
Consumer – A person who buys goods and services for the satisfaction of
human wants.
Producer – A person who produces goods.
Service holder – A person who is working or in a job and gets paid for it.
Service Provider – A person who gives services to others for a payment.
Data: Economic facts in terms of numbers
MEANING OF STATISTICS: The term Statistics was first used by German
Scientist Gottfried Achenwall in 1749. He is known as the ―Father of
Statistics.‖
The word statistics is used in two senses—Singular and Plural.
Statistics in Singular sense: Statistics refers statistical methods. ―Statistics
may be defined as collection,
presentation, analysis and interpretation of numerical data.‖
Statistical Methods:
1. Collection of data-Data should be collected by the investigator himself or
obtained from published or unpublished sources.
2. Organisation of data- Collected data are to be organised according to the
purpose of enquiry.
3. Presentation of data—Data collected and organised are presented in
some systematic manner to make it clear for the user.
4. Analysis of data –Various methods are used to analyse the data.
5. Interpretation of data—Interpretation of data implies the drawing of
conclusions on the basis of analysis of the data and certain decisions can
be taken.
Statistics in Plural sense: Statistics means numerical facts systematically
collected
According to Horace Secrist—‖ By statistics we mean aggregate of facts
affected to a marked extent by multiplicity of causes numerically expressed,
enumerated or estimated according to a reasonable standard of accuracy,
collected in a systematic manner for a predetermined purpose and placed
in relation to each other.
Scope of Statistics: Subject matter of Statistics can be classified into two
broad categories:
a) Statistical methods—Methods used in Statistics.
b) Applied Statistics—Application of statistical methods used in interpreting
the data to take decisions in solving economic problems.
Functions of Statistics:
1. Statistics helps in understanding economic problem
2. Statistics presents facts in definite form
3. Statistics helps in condensing mass data into a few numerical measures
4. Statistics establishes relation between factors.
5. Statistics helps in formulation of policies and plans.
6. Statistics helps in forecasting.
IMPORTANCE OF STATISTICS IN ECONOMICS:
1. Statistics in consumption—The data of consumption are useful and
helpful in planning the budget and improve the standard of living of
consumers.
2. Statistics in production—Statistics in of production are helpful for
adjustment of demand and supply and determining quantity of production.
3. Statistics in distribution---Statistical methods are used in solving the
problem of distribution of national income among various factors of
production.
4. Statistics in economic planning—Statistics helps in evaluating various
stages of economic planning through statistical methods.
5. Statistics helps in making economic laws like law of demand and
concept of elasticity.
6. It helps in understanding and solving economic problem.
7. It helps in studying market structure.
8. It helps in finding mathematical relations between variable
1 MARK QUESTIONS
1. Statistics is the study of__________ facts.
a) Quantitative
b) Qualitative
c) Both quantitative and qualitative
d) Aggregate
Ans (a)
2. Statistics in plural sense deals with________________
a) Numerical information
b) Collection of data
c) Presentation of data
d) Both (a) and (b)
Ans. (a)
3. Which of the following statement is incorrect?
(a). Resources have alternative uses
(b). Macroeconomics studies large aggregates
(c). Statistics studies only the aggregates of quantitative facts
(d) All numbers are statistics
Ans.(d)
4.ASSERTION (A): Statistics are numerical statement of facts in any
department of economy placed in relation to each other.
REASONING (R): Statistics is used in only singular sense
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and 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..
5. ASSERTION (A): Statistics are numerical statement of facts in any
department of economy placed in relation to each other.
REASONING (R): Statistics is used in only singular sense
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and 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. Statement 1: Economics is study of man in the ordinary business of life.
Statement 2: Economics is a science of wealth.
Alternatives:
a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Ans. a) Both the statements are true
7. Statement 1: Non-economic activities are concerned with creation of
money.
Statement 2: Teacher teaching his own son are related to non- Economic
activities.
Alternatives:
a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Ans. d) Statement 2 is true and Statement 1 is false.
8. Statement 1: In plural sense statistics may be defined as the collection,
presentation, analysis and interpretation of numerical data.
Statement 2: In a singular sense, statistics are numerical statements of
facts.
Alternatives:
a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
.
Ans. b) Both the statement are false.
9. The statistics is concerned with
a) Aggregate of qualitative fact
b) Aggregate of heterogeneous
c) Aggregate of disorganised fact
d) Aggregate of quantitative fact
Ans. (d)
3/4MARKS QUESIONS
1. Define Statistics in singular sense Explain the stages of statistical study.
Ans. Statistics, in singular sense
‗Statistics may be defined as the collection, presentation, analysis and
interpretation of numerical
data‘.
Stages of Statistical Study- These stages are:
(i) Collection of Data: This is the first step in statistical enquiry. Data
collected by
investigator himself or obtained from published or unpublished sources.
(ii) Organisation of data: Collected data is organized in a proper form which
involves
editing and classification.
(iii) Presentation of data: Organised data are presented in sum systematic
manners as
Tables, Diagrams and graphs etc
(iv) Analysis of data: After presentation of data, various methods are used
to analyse the data as
dispersion, correlation etc
(v) Interpretation of data: It involves statistical thinking, skill and experience.
On the
basis of this conclusion, certain decisions can be taken.
2. Discuss the importance of statistics in government planning.
Ans. Statistics in Economic Government: The government gathers the facts
related to :
(i) National income, Per capita income
(ii) Poverty, unemployment
(iii) Population
(iv) Helps of optimum utilization of scarce resources
3. Discuss the importance of statistics in Economies.
Ans. Statistics in Economics:
(i) Statistics helps in formulation of economic policies:
(ii) Formulation of law of demand and law of supply policies
(iii) Useful to study of behaviour of consumers and producers
(iv) Helps in establishing mathematical relation
(v) Statistics in production
(vi) Statistics in consumption
(vii) Statistics in distribution
4. Discuss the importance of statistics in Business
Ans. Statistics in Business: Statistics play a very important role in major
business
activities.
(i) For estimating market demand
(ii) For production planning according to market demand
(iii) Market research is based on statistics
(iv) For Trade policy
(v) Important for the detailed analysis of the money transactions in the
business
UNIT 2 - COLLECTION OF DATA
Collection of data is the first important aspect of statistical survey.
Data – Information which can be expressed in numbers.
Two sources of data –
(1) Primary Sources of data: Data originally collected by the investigator
himself are
known as primary data‘
(2) Secondary Sources of data „Secondary data are those which are
already in existence, and
which have been collected, for some other purpose than the answering of
the question in hand.‘
Difference between Primary and Secondary Data
a] Primary data is original data collected by the investigator while
secondary data is already existing and
not original.
b] Primary data is always collected for a specific purpose while secondary
data has already been collected
for some other purpose.
c] Primary is costlier or is more expensive whereas secondary data is less
expensive
Methods / Sources of Collection of Primary Data
(i) Direct Personal Investigation: The direct personal investigation is the
method by
which data are personally collected by the investigator from the
respondents.
Merits: (i) Originality
(ii) Accuracy
(iii) Reliability
(iv) Uniformity
(v) Elastic
(ii) Indirect Oral Investigation --Indirect oral investigation is the method by
which information is obtained not from the persons regarding whom the
information is needed‘
It is collected orally from other persons who are expected to possess the
necessary information.
Merits: (a) wide coverage
(b) Simple
(c) Expert opinion
(d) Free from bias
(e) Less expensive
Demerits:
(a) Less accurate
(b) Doubtful conclusions
(c) Biased.
(iii)Information from local sources or correspondents: The investigator
appoints local correspond at deferent places. They collect information in
their own way and furnish the same to the investigator.
Merits:
(a) Economical
(b) Continuity
(c) Wide coverage
(d) Suitable for special purpose
Demerits: (a) Loss of originality
(b) Lack of uniformity
(c) Less accuracy
(d)Personal bias
(e) Delay in collation.
(2) INFORMATION THROUGH QUESTIONNAIRES AND SCHEDULES
(i) Mailing (Questionnaire) surveys: Questionnaires are mailed to the
respondents. A letter is attached with the questionnaire giving the purpose
of enquiry. The respondent notes the answers against the questions and
returns the completed questionnaire to the investigator
Merits:
a) Least expensive
b) Only method to reach remote areas
c)Informants can be influenced
Demerits:
a) Long -response time
b) Cannot be used by illiterates.
c) Doubts cannot be cleared regarding questions
(ii) Enumerator‟s Method: Questionnaire is prepared according to the
purpose of enquiry. The enumerator himself approaches the respondent
with the questionnaire. The questionnaires which are filled by the
enumerators themselves by putting questions are called schedules.
Merits:
(a) Wide coverage
(b) Personal contact
(c) Accuracy
(d) Completeness
Demerits
(a) Expensive
(b)Time consuming
(c) Availability of enumerator
Telephonic interviews This mode data collection, the investigator seeks the
desired information from the respondents over the telephone.
Merits:
a) Relatively low cost
b) Relatively high response rate
c) Less influence on informants
Demerits:
a) Limited use
b) Reactions cannot be watched
c)Respondents can be influenced
Qualities of good questionnaire
(a) Limited question
(b) Simplicity
(c) No undesirable questions
(d) Proper order of the questions
(e) Calculation
(f) Instructions
(g) Cross verification
(h) Request for return.
Types of question
(a) Simple alternative question
(b) Multiple choice questions
(c) Open question
(d) Specific information question
Two main sources of secondary data:
(1) Published sources
(2) Unpublished sources
(1) Published sources:
(i) Government publication
(ii) Semi -government publication
(iii) Publication of research institutions
(iv) Report of committees and commissions
(v) Publication of research scholars
(vi) Journals and papers
(vii) International publication
(2) Unpublished sources: There are some unpublished secondary data as
well. These data are collected by the government organisations and others,
generally for their self- use or office record. These are not published. These
unpublished numerical information may, however, be used as secondary
data.
Two important sources of secondary data
(i) Census of India
(ii) Report and publication of national sample survey office (NSSO)
 Universe or population in statistics – Total items under study.
 Sample is a section of population from which information is to be
obtained.
CENSUS AND SAMPLE METHOD OF COLLECTION OF DATA
CENSUS METHOD
‗Census method that method in which data are collected covering every
item of the universe or population relating to the problem under
investigation‘.
SAMPLE METHOD
‗Sample method is that method in which data is collected about the sample
on a group of items taken from the population for examination and
conclusion are drawn on their bases‘.
Random sampling: Random sampling is that method of sampling in which
each and every item of the universe has equal chance of being a selected
the sample‘. There is an equal probability for every item of this universe
being selected in the sample.
(2) Non- Random Sampling
(i) Purposive Sampling -Purposive sampling is that method in which the
investigator himself makes the choice of the sample items in which in his
opinion the best representative of the universe‘.
(ii) Mixed Sampling: ‗According to this method of sampling, population is
divided into different strata having different characteristics and some of the
items are selected from each strata, so that the entire population gets
represented‘
(iii) Systematic Sampling ‗Units of the population are numerically,
geographically and
alphabetically arranged. Every item of the numbered items is selected as a
sample item‘.
(iv)Quota Sampling: In this method, the population is divided into different
groups or classes according to different characteristics of the population‘
(v)Convenience Sampling: In this method, sampling is done by the
investigator in such a manner that suits his convenience‘
1 MARK QUESTIONS
Q 1. A questionnaire is
(a) A list of questions pertaining to the investigation
(b) A list of answers
(c) A list of objectives of the investigation
(d) A list of data
Ans. (a)
Q 2. Primary data is more useful when
(a) Less time is available
(b) Source of origin is not important
(c) High degree of accuracy is required
(d) All of these
Ans.(c)
Q 3. Data collected from government publication is
(a) Primary data
(b) Secondary data
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Ans.(b)
Q 4. Which method involves study of each and every item of the universe
(a) Sample
(c) Random sampling
(c) Census
(d) None of these
Ans(c)
Q 5. Methods of statistical enquiry:
(a) Census method
(b) Sample metho
(c) Both (a) and (b)
(d) None of these
Ans. (c)
Q 6. In this method sample selection depends on the choice of the
investigator:
(a) Quota-sampling
(b) Cluster sampling
(d) Random sampling
(d) Purposive sampling
Ans. (d)
Q7. (i) Statement 1: Primary data originally collected in the process of
investigation
(ii) Statement 2: Primary data are costlier in terms of time, money and
efforts.
a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Ans. a) Both the statements are true
Q8. (i) Statement 1: Under direct personal investigation method data are
personally collected by the investigator.
(ii) Statement 2: This method allows wide coverage of the area of study
a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Ans. (c) Statement 1 is true and Statement 2 is false
Q9. (i) Statement 1: Sample method are more reliable and accurate.
(ii) Statement 2: By using sample method data are collected covering every
item of the
universe.
a) Both the statements are true
(b) Both the statements are false
20
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false
Ans. (b) Both the statements are false.
Q10. Sarvekshana is _____________ journal published by NSSO.
a) Weekly
b) Monthly
c) Quarterly
d) Yearly
Ans. (c)
3/4 MARKS QUESTIONS
Q1. Differentiate between census method and sampling method
Census Method Sampling Method
1) Every unit of population studied
2) Reliable and accurate results
3) Expensive method
4) Suitable when population is of homogenous nature
Few units of population are studied
Less Reliable and accurate results
Less expensive method
Suitable when population is of heterogeneous nature
Q2. What is meant by random sampling? .
Ans. Random sampling: ‗Random sampling is that method of sampling in
which each and
every item of the universe has equal chance of being a selected the
sample‘. There is an equal probability for every item of this universe being
selected in the sample
Q3. Write the advantages and disadvantages of Mailed Questionnaire
Method and Telephonic
Interview Method
Mailed Questionnaire Method:
Mailed Questionnaire Method:
Advantages Disadvantages
1) Least expensive
2) Only method to reach remote areas
3) Informants can be influenced
Long response time
Cannot be used by illiterates.
Doubts cannot be cleared regarding
questions
Telephonic Interview Method:
Advantages Disadvantages
1) Relatively low cost
2) Relatively high response rate
3) Less influence on informants
Limited use
Reactions cannot be watched
Respondents can be influenced
Q4. Differentiate between Primary and Secondary Data
a] Primary data is original data collected by the investigator while
secondary data is already existing and
not original.
b] Primary data is always collected for a specific purpose while secondary
data has already been collected
for some other purpose.
c] Primary is costlier or is more expensive whereas secondary data is less
expensive
6 MARKS QUESTIONS
Q1. What are the methods of collecting primary data?
a] Direct Personal Interview – Data is personally collected by the
interviewer.
b] Indirect Oral Investigation – Data is collected from third parties who have
information about
subject of enquiry.
c] Information from correspondents – Data is collected from agents
appointed in the area of
investigation.
d] Mailed questionnaire – Data is collected through questionnaire [list of
questions] mailed to
the informant.
e] Questionnaire filled by enumerators – Data is collected by trained
enumerators who fill
questionnaires.
f] Telephonic interviews – Data is collected through an interview over the
telephone with the
interviewer.
Q2. What is meant by direct personal investigation? Explain it.
Ans. Direct Personal Investigation-The direct personal investigation is the
method by
which data are personally collected by the investigator from the
respondents.
Merits: (i) Originality: Information is collected from the source of origin.
(ii) Accuracy: It provides first -hand information.
(iii) Reliability: Data collected by investigator personally and inquiry is
intensive, data
collected are reliable
(iv) Uniformity: There is uniformity in data collected by investigator
personally.
Demerits: (i) Difficult to study wide areas --Direct personal investigation
method cannot be
used if the area of investigation is large.
(ii) Costly: It is expansive method in term of time and money.
(iii) Complex: This method is complex as it requires investigator to be
trained.
Q3. What is indirect oral investigation? Give its suitability.
Ans. Indirect Oral Investigation: Indirect oral investigation is the method by
which
information is obtained not from the persons regarding whom the
information is needed‘
It is collected orally from other persons who are expected to possess the
necessary information.
Suitability: The field of investigation is large, Investigation is so complex in
nature, Direct
contact with concerned informants cannot be possible.
Merits: (i) wide coverage areas: This method can be used when field of
enquiry is large.
(ii) Simple: This is simple approach of data collection.
(iii) Expert opinion: An investigator can seek expert opinion.
(iv) Less expensive: It is less expansive method in term of time, labour and
money.
Demerits:-(i) Lack of accurate: In this method information is obtained from
person than the
concerned respondents, there is a possibility of not received true
information.
(ii) Doubtful conclusions-The collected information may be doubtful due to
carelessness of the witnesses.
(iii) Personal bias: There is a possibility of information being personal bias.
Q4. Describe the information from local sources method of collecting
primary data.
Information from local sources or correspondents-The investigator appoints
local
correspond at deferent places. They collect information in their own way
and furnish the same to the
investigator.
Suitability: Area of investigation is wide, Regular and continuous data are
required, High
accuracy.
Merits:(i) Economical: This method is inexpensive in term of time and
money.
(ii) Field of enquiry is large: It can cover a wide area under enquiry.
(iii) Suitable for special purpose: This method is suitable for special
investigation.
Demerits: (i) Lake of originality: This method is Lack of originality because
personal contact with
respondents
(ii) Less accuracy: The data collected by this method are less accurate.
(iii) More time consuming: There is a delay in the collation of information
needed.
Q5. What are the qualities of good questionnaire?
Ans. Qualities of good questionnaire
(i) Limited number of questions: The number of questions should be limited.
More questions
discourage people to completed questionnaire.
(ii) Simple and clear: The questions asked should be short, clear and short.
(iii) No personal questions: The questions which are too personal in nature,
should be
avoided.
(iv) Arrangement of questions Proper order: The question should be
arranged in a proper
order.
(v) No calculation: Questions involving mathematical calculation must be
avoided.
(vi) Instructions: A questionnaire must show clear instruction for filling the
given
information.
(vii) Cross examination: Question may be papered in such a way which
helps cross
examination.
Q6. What are secondary data? Discuss the published sources of secondary
data.
Ans. Secondary data are those which are already in existence, and which
have been collected,
for some other purpose than the answering of the question in hand.
Published sources
(i) Government publication: Government departments and ministries
publish
current information with statistical facts as their regular activity. It is reliable
source of
information.
(ii) Semi -government publication: Municipalities and metropolises
commission publish
information relating to health, education, births and other economic
infrastructure. It is reliable
source of information.
(iii) Publication of research institutions: Large-number of universities and
research institution publish
various research activities.
(v) Report of committees and commissions: Various committees and
commissions are
appoint by the government for suggestions and policy making works. Thais
repot also
furnish a lot of statistical information.
(vi) Publication of Trade institutions: Trade association have their research
and
statistical divisions which collect and publish data. It is reliable source of
information.
(vii) Journals and papers--Journals and news- papers regularly publish and
collect data on
various subjects and topics