CHAPTER -1
INTRODUCTION
STATISTICS
CLASS- 11
Interpret the following picture
Scarcity
Example: The pocket money you get to spend is
limited and your wants are unlimited.
Problem of choice
UNLIMITED WANTS & LIMITED
RESOURCES
•Suppose you have ` •Suppose the Government
20,000 and you want to wants to increase production
purchase one computer of sugar to satisfy increasing
and a LED TV. With ` human wants.
20,000 only in hand, you •Now, this is possible only by
cannot have both. reducing the production of
•You can either buy some other goods as every
computer or LED TV. economy has limited
resource
Problem of choice
Alternative use of
resources
Set up a
factory
Grow Build a
crops house
LAND
(limited
resource)
Problem of choice
for both consumers
and producers
❑Scarcity is the root cause of all economic problems.
❑There would have been no economic problem if resources would not have
been SCARCE.
Economic activities
❑Economic activities are ones that are
undertaken for a monetary gain.
❑The goal is creation of money.
Doctors
Workers Shopkeeper attending
Example: working in a selling goods in to
factory. his shop.
patients
in a clinic.
Non –economic activities
❑Human activities that are not concerned with
creation of money.
A person A teacher
cooking food teaching
Example:
for his/her his/her own
own family. children.
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9
Agents of Economic
activities
PRODUCER CONSUMER SELLER EMPLOYER EMPLOYEE
A producer An employee
is one who A consumer is A seller is is one who
one who buys An provides
produces one who
goods (e.g goods or employer is physical or
services for the sells goods mental
books, one who
direct (or services for
clothes) or employs
satisfaction of services) others in
services his (or his others and exchange for
with a
(e.g. friends’/family gives them some
doctor’s members’) profit remuneration
wages.
services) needs. motive. in cash or
kind.
Consumption
❑The consumer has limited income with which he
has to purchase various goods and services, at
gives prices.
❑Which bundle of goods and services to choose
from various alternatives, so that his satisfaction
is maximised, forms the crux of theory of
Consumption.
❑This point of maximum consumer satisfaction at
given income and price levels is
called Consumer’s Equilibrium.
Production
❑The producer has to make decisions like: what
to produce, how much to produce and how to
(with which technique) produce.
❑Having decided what to produce, he has to
choose that level of output which maximises
his profits.
❑The level of output where profits of the
producer are maximised is called Producer’s
Equilibrium.
Distribution
❑Distribution studies how the total output of
the country, called GDP or national income is
distributed through wages, profits, and
interest.
Definition of economics
• “Economics is the study of how people and
society choose to employ scarce resources
that could have alternative uses in order to
produce various commodities that satisfy their
wants and to distribute them for consumption
among various persons and groups in society.”
Some Other Issues in Economics
• Unemployment, poverty, unequal distribution of
income.
• To look into these issues, economists need to collect
and put together facts about these problems.
• Thus, modern economics includes learning the basic
skills involved in making useful studies for measuring
poverty, income distribution and unemployment.
These skills relate with study of statistics.
• This explains why we need Statistics to be a part of
modern economics
