Concept of Economics and Significance of Statistics

Fundamental vocabulary terms from economic principles and the foundational concepts of statistics including production, consumption, and statistical, and descriptive methods.

Consumer

A consumer is one who consumes goods and services for the satisfaction of his wants.

Consumption

The process of using up utility value of goods and services for the direct satisfaction of our wants.

Utility value

Inherent capacity of goods and services to satisfy human wants.

Producer

A producer is one who produces and/or sells goods and services for the generation of income.

Production

The process of converting raw material into useful things which acquire utility value during the process.

Saving

The part of income which is not consumed; it is an act of abstinence from consumption.

Investment

Expenditure by the producers on the purchase of such assets which help to generate income.

Economic Activity

An activity which is related to the use of scarce means or resources in relation to our wants.

Economic Problem

The problem of choice, or the problem of allocating scarce resources to alternative uses, arising on account of the fact that resources are scarce.

Economics (Robbins' Definition)

A science that studies human behaviour as a relationship between ends and scarce means which have alternative uses.

Theory of Consumption

The study of behaviour of human beings as consumers or buyers regarding how they allocate income to maximize satisfaction.

Theory of Production

The study of producers' behaviour regarding how they choose inputs and products to minimize cost and maximize profit.

Theory of Distribution

The study of how income or GDP is distributed among the agents of production including land, labour, capital, and entrepreneurship.

Microeconomics

The branch of economics dealing with economic issues or problems related to units like a household, a firm, or an industry to maximize individual welfare.

Macroeconomics

The branch of economics dealing with economic issues or problems at the level of the economy as a whole to promote social or collective welfare.

Statistics (Plural Sense)

Numerical statements of facts in any department of enquiry placed in relation to each other, or quantitative data affected by a multiplicity of causes.

Statistics (Singular Sense)

The science or methods of collecting, organizing, presenting, analyzing, and interpreting numerical data.

Quantitative Data

Data relating to variables like income, expenditure, and investment that can be expressed in numerical terms.

Qualitative Data

Data referring to qualitative attributes of objects, such as IQ levels or beauty, which cannot be expressed in numerical terms but can be ranked or rated.

Universe (or Population)

The aggregate of all items or units relating to a statistical study, such as a study group of $1,000$ students.

Descriptive Statistics

Methods used for the collection, presentation, and analysis of data, such as measurements of central tendency, dispersion, or correlation.

Inferential Statistics

Methods by which conclusions are drawn relating to the universe or population on the basis of a given sample.

Inter-sectoral Comparisons

Comparisons made across different sectors of the economy, such as magnitude of unemployment in rural versus urban sectors.

Inter-temporal Comparisons

The understanding of change in the magnitude of an economic problem over time.

Economic Equilibrium

A state of balance for the producer where profits are maximum, or for the consumer where satisfaction is maximum.