UNIT – 1
Introduction
By Vivek Shah
CONCEPT OF
ECONOMICS AND
SIGNIFICANCE OF
STATISTICS IN
ECONOMICS
Adam Smith (1723-1790)
Adam Smith (1723-1790)
• Scottish Economist and Philosopher
• Father of Economics
“The real tragedy of the poor is the poverty of their aspiration.
- Adam Smith
Alfred Marshall (1842-1924)
Alfred Marshall (1842-1924)
• The study of mankind in the ordinary business of
life.
Lionel Robbins (1898-1984)
Lionel Robbins (1898-1984)
• A science that studies human behaviour
as a relationship between ends and
scarce means which have alternative
uses.
1. Economics is a science of human behaviour concerned with problem of Economic
choice of the allocation of scarce resources to alternative uses in such a manner that
consumers can maximise their satisfaction, producers can maximise their profits and
society can maximise its social welfare.
2. ‘Economics’ is derived from two Greek words : Oikos (Household) and Nemein
(managment).
3. Economic problem is the ‘Problem of choice’. It arises due to:
1. Resources are scarce
2. Resources have alternative uses
WHAT IS ECONOMICS ?
Three distinct components of
Economic Activity are:
• Consumption • Production • Distribution
LET’S DO IT YOURSELF….
• What do you mean by scarcity of resources?
• State and explain any Five features of Indian Economy.
TYPES OF ECONOMICS
1. Statistics is defined both in singular sense and plural sense.
1. Statistics – in Singular Sense:
1. In singular sense, statistics means science of statistics or statistical methods. It refers to
techniques relating to collection, classification, presentation, analysis and interpretation of
quantitative data.
1. Statistics – in Plural Sense:
1. In Plural sense, statistics refers to information in terms of numbers or numerical data,
such as population statistics, employment statistics, statistics concerning public
expenditure, ets.
1. Give me a few examples of data that you can collect in your school or in your everyday life?
For example: Out-Pass Efficiency Experiment
1. Study of the scope of statistics includes:
1. Nature of Statistics
2. Subject Matter of Statistics, and
3. Limitations of Statistics
1. “Statistics is both a science as well as an art.”
1. Subject matter of Statistics has two components
1. Descriptive vs Inferential: with an example…
1. Study of Numerical facts only:
2. Homogeneity of Data, an essential requirement:
3. It is prone to Misuse:
1. What did we study?
1. Statistics- Singular and Plural
2. Scope of Statistics:
1. Nature of Statistics
2. Subject matter of Statistics
1. Descriptive vs Inferential
3. Limitations of Statistics
1. Study of Numerical facts only
2. Homogeneity of Data, a necessity
3. Prone to misuse
1. Inter-sectoral and Inter-Temporal Comparisons:
2. Construction of Economic Theories:
3. Economic Forecasting:
4. Formulation of Policies:
The price and quantity demanded have an
Inverse Relationship.
For instance, a company selling electronics might invest more in production based on a
forecast predicting a rise in consumer spending.
•The NSO conducts large-scale surveys in India, collecting data on various socio-
economic indicators like poverty, employment, and consumption patterns.
•This data is used by the government to formulate policies like MGNREGS, which
guarantees 100 days of wage employment to rural households in a year.
•Analysis of NSO data on rural unemployment and poverty helps determine the areas and
demographics most in need of the employment guarantee scheme.