Worksheet Solutions: Introduction - 2 | Economics Class 11 - Commerce PDF Download

Fill in the Blanks 

Q1: Consumption refers to ______________ goods and services to satisfy our wants or needs directly.
Ans: utilizing
Consumption is the act of using goods and services to fulfill one's needs and wants directly. It is a fundamental concept in economics.

Q2: What is the primary focus of the study of production? It involves the process of transforming ______________ into useful goods or services.
Ans: raw materials
The primary focus of the study of production is the transformation of raw materials into finished goods or services that can be sold in the market.

Q3: Saving is the portion of income that is not spent on consumption and involves the practice of restraining ______________ consumption.
Ans: immediate
Saving involves not spending all of one's income immediately but setting aside a portion for future use or investment.
 
Q4: Economic activity pertains to activities involving limited resources, as resources are always scarce relative to our ______________.
Ans: wants
Economic activity involves the use of limited resources to produce goods and services because resources are always insufficient to fulfill all our wants.

Q5: What term refers to the expenditure made by producers to acquire assets that can generate income? It is known as ______________.
Ans: investment
Investment is the expenditure made by producers to acquire assets (like machinery or real estate) that can generate income in the future.

Q6: An employee receives payment in the form of salary or wages from an employer for the work they provide. Who is an ______________ in economics?
Ans: employee
An employee is an individual who works for an employer and receives payment (salary or wages) for their services. In economics, this relationship is essential.

Q7: What is the widely accepted definition of economics? "Economics is the study of how people and society choose to employ scarce resources that could have ______________ in order to produce various commodities that satisfy their wants and to distribute them for consumption among various persons and groups in society."
Ans: alternative uses
This definition of economics emphasizes the central concept of scarcity and the need to make choices about how to use limited resources with alternative uses.

Q8: In economics, what is the relationship between a consumer and a producer?
Ans: In economics, consumers are individuals who use goods and services, while producers are individuals or entities that create and sell goods and services. Producers supply the goods and services that consumers demand.

Q9: What is the primary focus of the study of distribution in economics?
Ans: The primary focus of the study of distribution in economics is understanding how a country's total income or GDP is distributed among wages, profits, and interest, excluding income from international trade and investment.

Q10: Statistics is the study of collecting, analyzing, interpreting, presenting, and organizing ______________.
Ans: data
Statistics is the field of study that deals with data, involving the collection, analysis, interpretation, presentation, and organization of data to draw meaningful conclusions.

Assertion and Reason Based

Q1: Assertion: Consumption refers to utilizing goods and services to satisfy our wants or needs directly.
Reason: The economic problem arises due to the scarcity of resources.
(a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.
Ans: (a)
The assertion is true because consumption is about fulfilling wants and needs directly. The reason is also true because the economic problem indeed arises due to the scarcity of resources, which forces people to make choices about how to use limited resources to fulfill their wants and needs.

Q2: Assertion: Statistics is the study of collecting, analyzing, interpreting, presenting, and organizing data.
Reason: Statistics primarily deals with individual cases and not aggregates.
(a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.
Ans: (c)
The assertion is true, but the reason is false. Statistics often deals with aggregates and not just individual cases. It focuses on summarizing and analyzing data on a larger scale.

Q3: Assertion: Economic forecasting is made possible through statistics.
Reason: Statistics facilitates comparisons between different sets of data.
(a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.
Ans: (a)
The assertion is true because statistics is instrumental in economic forecasting. The reason is also true because comparisons of different data sets are a common use of statistics in economic analysis.

Q4: Assertion: Statistics is best utilized by experts with appropriate knowledge and skills.
Reason: The interpretation of statistical results can sometimes lead to erroneous conclusions.
(a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.
Ans: (a)
The assertion is true because using statistics effectively often requires expertise. The reason is also true because misinterpretation of statistical results can indeed lead to incorrect conclusions.

Q5: Assertion: The economic problem arises due to the scarcity of resources.
Reason: Economic forecasting is made possible through statistics.
(a) Both Assertion and Reason are true, and Reason is the correct explanation of Assertion.
(b) Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.
(c) Assertion is true, but Reason is false.
(d) Both Assertion and Reason are false.
Ans: (b)
Both the assertion and reason are true, but economic forecasting is not the direct result of the economic problem arising from resource scarcity. Economic forecasting is enabled by statistics but is not a consequence of the scarcity problem.

Very Short Answer Type Questions

Q1: Define "producer" in economics.
Ans: Producer in economics refers to an entity that creates goods or services for sale in the market.

Q2: What is the primary focus of the study of consumption in economics?
Ans: The primary focus of the study of consumption in economics is understanding how individuals use their income to fulfill their wants and needs.

Q3: Explain the concept of saving in economics.
Ans: Saving in economics involves not spending all of one's income immediately, and it is the practice of setting aside a portion for future use or investment.

Q4: Why does the economic problem arise?
Ans: The economic problem arises because of the scarcity of resources, which forces individuals and society to make choices about how to allocate limited resources.

Q5: Define "investment" in economics.
Ans: Investment in economics is the expenditure made by producers to acquire assets that can generate income in the future.

Q6: Who is an "employee" in economics?
Ans: In economics, an employee is an individual who receives payment in the form of salary or wages from an employer for the work they provide.

Q7: Provide the widely accepted definition of economics.
Ans: The widely accepted definition of economics states that it is the study of how people and society choose to employ scarce resources that could have alternative uses to produce various commodities for consumption.

Q8: How does statistics relate to economics?
Ans: In economics, the relationship between a consumer and a producer is that consumers use goods and services produced and supplied by producers.

Q9: Explain the features of statistics in economics.
Ans: The primary focus of the study of distribution in economics is understanding how a country's total income or GDP is distributed among wages, profits, and interest.

Q10: List three functions of statistics in economics.
Ans: Data refers to information or facts collected in economics and is the subject of study in statistics.

Short Answer Type Questions

Q1: Describe the difference between economic and non-economic activities.
Ans: Economic activities involve the use of resources to produce goods and services for the market, while non-economic activities are those performed for personal satisfaction and not for profit. An economic activity results in an exchange in the market, while a non-economic activity does not.

Q2: Explain how statistics aids in policy formation in economics.
Ans:  Statistics is essential in policy formation in economics because it provides data-driven insights into economic trends and issues. Policymakers can use statistical analysis to make informed decisions, assess the impact of existing policies, and design effective measures to address economic challenges.

Q3: What are the limitations of statistics in economics?
Ans: Statistics has several limitations. It does not focus on individuals but aggregates. Interpreting statistical results can lead to erroneous conclusions if done improperly. Statistics deals primarily with numerical data. Statistical laws apply to averages, not individual cases. Effective utilization of statistics requires expertise. Data uniformity and homogeneity are necessary for accurate analysis. Misuse of statistics can be a significant limitation, as it's susceptible to misinterpretation. Context and reference are vital for accurate interpretation.

Q4: Discuss the primary aim of gathering data in economics.
Ans: The primary aim of gathering data in economics is to understand and analyze economic issues systematically. By collecting data on various economic factors, one can identify the root causes of economic problems, such as poverty, unemployment, or low productivity. This data is crucial for developing effective policies and measures to alleviate these issues.

Q5: Define statistics in both plural and singular senses.
Ans: In a plural sense, statistics refers to information presented in terms of numbers or numerical data, such as population statistics or employment statistics. In a singular sense, it refers to techniques or methods related to the collection, classification, presentation, analysis, and interpretation of quantitative data.

Q6: How does statistics facilitate comparisons between different sets of data?
Ans: Statistics facilitates comparisons between different sets of data by providing a quantitative basis for evaluating and contrasting various phenomena. This enables economists to assess the relationships between economic factors, make inter-sectoral and inter-temporal comparisons, and test hypotheses in economic research.

Q7: Explain the concept of economic forecasting in economics.
Ans: Economic forecasting is the process of using statistical analysis and historical data to make predictions about future economic trends, such as GDP growth, inflation rates, or employment levels. By analyzing past trends and patterns, economists can make informed forecasts to assist in decision-making and policy formulation.

Q8: Why is it important to have proper context and reference for accurate interpretation of statistical results in economics?
Ans: It is important to have a proper context and reference when interpreting statistical results in economics. Without context, statistics may be misinterpreted or lead to incorrect conclusions. Context provides a framework for understanding the significance of the data and its implications for economic analysis and decision-making.

Long Answer Type Questions

Q1: Discuss the fundamental relationship between economics and statistics, and how statistics plays a crucial role in understanding and addressing economic issues. Provide examples.
Ans: Economics and statistics have a fundamental relationship. Statistics is crucial in understanding and addressing economic issues. By systematically collecting, analyzing, and interpreting economic data, statistics provides the empirical foundation for economic research and policymaking. For example, when addressing poverty, economists use statistics to identify contributing factors like unemployment, low productivity, and outdated technology. This data-driven approach is essential for developing effective policies and measures to alleviate poverty. In essence, economics relies on statistics to uncover the underlying causes of economic problems and formulate informed solutions.

Q2: Explain the features of statistics in economics, highlighting the significance of each feature. Use examples to illustrate these features.
Ans: Statistics in economics possesses several features, each with its significance:

• Aggregate of Facts: Statistics compiles data into a manageable form, providing a comprehensive view of economic phenomena.
• Numerically Expressed: Numerical data enable precise analysis and comparison of economic variables.
• Affected by a Multiplicity of Causes: Economic issues have multiple causes, and statistics helps identify and disentangle these factors.
• Reasonable Accuracy: While not always perfect, statistics provides reasonably accurate representations of economic phenomena.
• Placed in Relation to Each Other: Statistics enables the comparison of economic variables, revealing relationships and trends.
• Predetermined Purpose: Statistics serves a specific purpose, such as analysis, policy formulation, or forecasting.
• Estimated: Statistics often involves making estimations based on available data.

Q3: Elaborate on the different functions of statistics in economics and provide real-world scenarios where each function is applicable.
Ans: Statistics serves various functions in economics:

• Summarizing Data: Statistics condenses large volumes of data into a few key measures, simplifying complex information.
• Identifying Correlations: Statistical analysis helps identify relationships between economic factors, such as the correlation between inflation and unemployment.
• Economic Forecasting: Statistics aids in predicting future economic trends and conditions, enabling informed decision-making.
• Policy Formulation: Policymakers use statistical information to design effective measures to address economic issues.
• Policy Evaluation: Statistics is essential for assessing the effectiveness of policies that have been implemented.
• Causal Relationships: Economists use statistical methods to establish causal relationships between different sets of data.
• Inter-Sectoral and Inter-Temporal Comparisons: Statistics allows for comparisons between different sectors of the economy and across different time periods.
• Quantitative Representation: Statistics provides a quantitative representation of economic problems, making them more understandable and actionable.

Q4: Analyze the limitations of statistics in economics, focusing on the challenges and potential pitfalls that economists should be aware of when using statistical data in their analyses.
Ans: While statistics is a powerful tool in economics, it has limitations:

• Focus on Aggregates, Not Individuals: Statistics primarily deals with aggregate data, making it less suitable for studying individual cases or outliers.
• Potential for Misinterpretation: The interpretation of statistical results can sometimes lead to erroneous conclusions, especially if not done by experts.
• Numerical Data Focus: Statistics is concerned with numerical or quantitative data, potentially overlooking qualitative aspects of economic phenomena.
• Applicability to Averages: Statistical laws and principles are generally applicable to averages and may not accurately represent individual cases.
• Expertise Required: Effective use of statistics demands expertise in data collection, analysis, and interpretation.
• Uniformity and Homogeneity: Data should be uniform and homogeneous for valid statistical analysis.
• Misuse Potential: Statistics can be misused or misinterpreted, leading to incorrect conclusions or biased results.
• Context and Reference: Accurate interpretation of statistical results requires proper context and reference to avoid misinterpretation.