Statistics for Economics- Assertion-Reason & Case Based Questions

Assertion and Reasoning

Question 1. 
Assertion (A): Mohit gets a raise in his salary by 10% as he was a hard-working person and was an employee of the week for three months straight.
Reason (R): The raise in the salary is a part of the consumption for Mohit.
(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, 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.

Ans: (c)

Explanation:

(i) Assertion: Mohit received a 10% pay rise because of his hard work and repeated recognition. This statement is true.

(ii) Reason: The claim that a pay rise is part of consumption is false. A pay rise increases one's income, it is not itself consumption.

(iii) Justification: Income refers to earnings such as salary or wages. Consumption is the act of using goods and services to satisfy wants. While a higher income may enable greater consumption, the pay rise remains income and should not be classified as consumption.

Question 2.
Assertion (A): Housewife working in the house is termed as Non-economic activity.
Reason (R): There is no monetary gain or salary paid to the housewife for working in the house.
(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, 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.

Ans: (a)

Explanation:

(i) Assertion: Household work carried out by a housewife is treated as a non-economic activity. This is true.

(ii) Reason: The statement that household work usually receives no monetary payment is true in most cases.

(iii) Justification: Non-economic activities are those done out of affection, duty or care without direct monetary reward. Since routine household chores normally do not earn a salary, the Reason correctly explains the Assertion.

Question 3.
Assertion (A): Arun purchased a car from the Bharat Automobiles.
Reason (R): Arun is a consumer as he was the reason of the economic activity performed
(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, 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.

Ans: (b)

Explanation:

(i) Assertion: Arun bought a car from Bharat Automobiles. This is true.

(ii) Reason: The statement that Arun is a consumer is also true, but the wording "as he was the reason of the economic activity performed" is not the correct explanation.

(iii) Justification: A consumer is a person who buys goods or services for personal use or satisfaction. Arun is a consumer because he purchased the car for his own use. The fact that his purchase caused a sale does not define him as a consumer, so the Reason, though true in identifying him as a consumer, does not correctly explain the Assertion.

Question 4.
Assertion (A): Statistics cannot calculate the qualitative aspects of economics.
Reason (R): Qualitative aspects are the aspects that influence the working of an economy, though cannot be expressed in terms of money.
(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, 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.

Ans: (a)

Explanation:

(i) Assertion: Statistics cannot calculate qualitative aspects of economics. This is true.

(ii) Reason: Qualitative aspects influence economic behaviour but are not readily expressed in monetary or numerical terms. This is true.

(iii) Justification: Statistics is a discipline that works mainly with numerical data and quantitative measures. Qualitative factors such as culture, attitudes or values affect the economy but cannot be directly converted into numbers for standard statistical calculation; therefore the Reason correctly explains the Assertion.

Question 5.
Assertion (A): Rajiv scored 57 in Mathematics, Ravi scored 98 in Statistics, Anita Scored 45 in Economics. The given data is statistical data.
Reason (R): The statistical data needs to be numerical in nature.
(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, 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.

Ans: (a)

Explanation:

(i) Assertion: The marks of Rajiv, Ravi and Anita constitute statistical data. This is true.

(ii) Reason: Statistical data must be numerical. This is true.

(iii) Justification: Statistics deals with quantitative information that can be measured and analysed. Since the marks are numbers, they qualify as statistical data and the Reason correctly explains the Assertion.

Case-Based Questions

1. Read the following passage and answer the questions that follow: 
Activities involved in production (manufacturing), distribution (transportation) and consumption (retail) are constantly seeking economies to improve their competitiveness and increase their market share. The consumption of goods and services is a primary component of economic well-being and, as such, a primary indicator of living standards. Wealth and income are available to support consumption, today and in the future. Production, in the market and at home, supports consumption.

Economies of transportation relate to the benefits that lower transport costs may grant to specific activity sectors and are derived from a locational choice. For production, it relates to a location that minimizes total transport costs and thus lowers production unit costs. Some are elements of transport costs in production while others are elements of transport costs in consumption.

Economies of scope relate to the benefits derived by expanding the range of goods and services. For production, they are commonly based on product diversification and flexible manufacturing systems able to produce a variety of products in view of changes in the demand and consumer preferences.

For distribution, economies of scope are very important and commonly achieved when a transporter is able to bundle several different loads into fewer loads. For consumption, activities offering a wider range of goods or services are usually able to attract more customers since they have more choices. Economies of scale and economies of scope are highly related.

Q1. Establishing a dairy for producing milk products for consumers which turns to be a method of earning wealth is an example of economic activity.
(a) True
(b) False

Ans: True

Explanation:

Setting up a dairy involves producing goods for sale and earning income or profit. Such activities that produce goods or services for the purpose of earning wealth are known as economic activities; therefore the statement is true.

Q2. Economics is a ..................... science which studies the economic behaviour of a man. 
(a) social
(b) physical
(c) both (a) and (b)
(d) none of these

Ans: (a)

Explanation:

Economics is a social science because it studies how individuals and societies make choices about using scarce resources to satisfy needs and wants.

Q3. Assertion (A): Economies of scale and economies of scope are highly related.
Reason (R): Both economies of scale and economies of scope result in savings in cost.
Select the correct alternative from the following:
(a) Both Assertion (A) and Reason ( R) are true.
(b) Both Assertion (A) and Reason (R) are false.
Ans: (a)

Explanation:

(i) Assertion: Economies of scale and economies of scope are closely related. This is true.

(ii) Reason: Both types of economies lead to cost savings. This is true.

(iii) Justification: Economies of scale reduce per-unit cost by increasing output volume, while economies of scope reduce costs by sharing resources or producing a wider range of products. Both approaches aim to lower costs, so the Reason supports the Assertion.

Q4. When we want to know how the consumer decides, given his income and many alternative goods to choose from, what to buy when he knows the prices. This is the study of ..................... .
(a) production
(b) consumption
(c) both (a) and (b)
(d) none of above

Ans: (b)

Explanation:

The description refers to how a consumer makes choices given income and prices. The study of such decision-making is the study of consumption or consumer behaviour.

2. Read the following passage and answer the question that follows: 
Alok and Shyam went to their teacher and asked help for properly understanding statistics. While enquiring with them their teacher Mrs. Tiwari understood that she needed to start with the basics with them. She told them Statistics is a mathematical tool used by us to analyse any sort of data. For example, with the help of statistics we can calculate the average height of the students in your class, or average marks that the students might have got in statistics or any other subject. Shyam asked, "Can we calculate the interest of a person using statistics?" Mrs Tiwari said, "We can only calculate the things that can be expressed in quantitative form, that is in terms of numbers then we can use statistics, or else statistics is of no use." Alok asked, "Can I find an average of my height and weight using statistics?" Mrs Tiwari smiled and then answered, "No Alok. The data needs to be homogeneous. You cannot find the relation between the data which is not related to each other." Alok thought for a while and then again said, "But what is BMI Index then, ma'am? It is calculated with the help of height and weight of a person." Mrs. Tiwari said, "That is an excellent question, Alok. Body Mass Index is the ratio between the two, but not an average. When we talk of statistics 

it is not only related to only average, but we can also analyse trends, measure relations and see the depth of the data." They both thanked their teacher and went back.
Q1. In statistics, the data needs to be related to each other.
(a) True
(b) False

Ans: True

Explanation:

When combining or comparing data, it should be related (homogeneous) so that statistical measures-such as an average-are meaningful. Therefore the statement is true.

Q2. Which of the following is not the use of statistics?
(a) Calculating the average of the data
(b) Calculating the trend of the data
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Ans: (d)

Explanation:

Both calculating averages and analysing trends are standard uses of statistics. Since both (a) and (b) are uses, the option that correctly states that neither (a) nor (b) is "not a use" is option (d). In other words, neither (a) nor (b) is an answer that would claim they are not uses, so (d) is correct.

Q3.  .................... it is not only related to only average, but we can also analyse trends.
(a) Statistics
(b) Economics
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Ans: (a)

Explanation:

Statistics does more than compute averages; it helps to analyse trends, measure relationships and explore the structure of data.

Q4. What can't statistics be used for?
(a) Non-numerical data
(b) Quantifiable data
(c) Related data
(d) None of the above

Ans: (a)

Explanation:

Statistics requires data that can be expressed in quantitative or measurable terms. Purely non-numerical information that cannot be converted into numbers cannot be processed by standard statistical methods; therefore option (a) is correct.