NCERT Solution for Class 11 Commerce Statistics for Economics Chapter 1 - Introduction
NCERT Solution for Class 11 Commerce Statistics for Economics Chapter 1 - Introduction Page/Excercise 8
- Statistics can only deal with quantitative data. True
Yes, statistics deals only with quantitative data as it studies data which has numerical values. Qualitative variables such as beauty, honesty and kindness cannot be studied.
- Statistics solves economic problems. True
Statistics analyses the various economic problems such as unemployment, poverty and inequality in a detailed manner. It presents economic problems in a definite form. Thus, it helps in identifying the causes of economic problems through statistical tools and methods. In this way, it helps in taking various corrective measures to solve these problems.
- Statistics is of no use to Economics without data. True
Statistics is all about data and helps economists to make interpretations and conclusions about the various issues or problems in a precise form. Statistical data reveals quantitative and qualitative facts related to data. Thus, if statistics does not provide data, then it is of no use to Economics.
Activities which constitute the ordinary business of life:
- Purchase of goods and services
- Selling goods and services for profit
- Producing goods and services
- Working for someone for wages or salary
- Providing services to others for a payment
Yes, these activities are economic activities because they are associated with production, consumption, saving and investment and are for some monetary gain so that livelihood can be earned.
Statistical data is essential for formulating policies of economic development. This can be understood with the following examples:
Example 1: If the government wants to formulate or modify labour laws, then the government will require statistical data on working conditions, number of working hours and minimum wages received by workers.
Example 2: If the government is formulating policy for poverty alleviation, then data related to it will be required.
Wants of every economy or individual are unlimited, but the resources to satisfy them are scarce. This gives rise to the problem of choice as limited resources are to be allocated to the best possible use. Let us understand this with the following examples:
- An economy with limited amount of resources needs to decide between the production of consumer goods and capital goods. Because the resources to produce consumer and capital goods are limited, the decision regarding the quantities to be produced is based on the need of the economy for the same.
- At an individual level, let us assume that a child has limited money (say Rs 10) and he wants to consume ice cream and chocolate. Because the child has only Rs 10, he needs to choose between ice cream and chocolate based on his preference. If he would have unlimited resources, then he would have consumed both ice cream and chocolate.
Wants are unlimited, but the resources to satisfy them are limited. Thus, we fulfil those wants first which are assigned first rank in our priority list. That is those wants will be fulfilled first which provide the maximum level of satisfaction to the consumer given the income of the consumer and prices of goods and services.
Reasons for studying Economics:
- Economics is studied to understand the behaviour of consumers. That is to study how consumers choose among different consumption bundles given their income and prices of goods so that they get maximum level of satisfaction.
- It is studied to analyse the production theory. This theory studies the producer's behaviour, i.e. how he combines different inputs given their prices so that cost is minimised and profit is maximised.
- It helps in studying theory of distribution. Under this theory, the distribution of national income is studied.
- Various problems of an economy such as unemployment and poverty are studied and analysed.
Yes, it is true that statistical methods are no substitute for common sense. This is because common sense should be used before making any interpretation from statistical data. Data should not be used blindly as there may be errors in it. This statement can be better understood with the following examples:
- If the school authority finds that the average shoe size of 150 students of Class XII is 6 and it places an order for 150 shoes of size 6, then it will be using statistical data without common sense resulting in many shoes not fitting students.
- If statistical data reveals that there is a direct relation between education and poverty, then such data is misleading and should not be believed blindly.