Economics

Introduction Marshall defined economics as social science which studies economic activities of human beings concerned with allocation of resources with optimum efficiency. Before 1890 economics was considered as political science but later economics evolve as a separate discipline in the writings of Classical economists. The major definitions of economics are: • Wealth Definition • Welfare Definition • Scarcity Definition • Growth-oriented Definition The study of economics deals with production (study of the producer behavior relating to production of different commodities at a given level of cost and price), consumption (study of consumer behavior regarding different commodities to be consumed) and distribution (study of the distribution of income amongst different factors of production in the form of rent, wages, profits and interest). Statistics in economics is used for collection, organization, presentation, analysis and interpretation of data. Statistics is an indispensible tool for an economist that helps him to understand economic problem and in taking decisions. Importance of statistics is realized in forecasting the business plans like sale, revenue, price and demand. In spite of wide scope, it has its limitations. The limitations of statistics are as follows: • It deals with set of numerical data only. • It does not study qualitative aspect. • It deals with averages. • Inexperienced and untrained persons may give wrong conclusions. • It is probabilistic in nature and not in exact. Owing to these reasons statistics is not trustworthy. The main distrust of statistics is that it does not always bear on its face, the label of its quality. It can be misused by deliberately manipulating data.

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