Class 11 Economics Notes

The two halves answer two different questions. Statistics answers how the economy is measured, microeconomics answers how the economy behaves. The paper expects the student to move between them comfortably, because a numerical question on index numbers and a theoretical question on the consumer sit side by side in the same examination.

• Unit 1, introduction: what economics is, and what statistics means, its scope, its functions and its importance.
• Unit 2, collection, organisation and presentation of data: sources of data, census and sample, frequency distribution, and the tables and diagrams that carry the data.
• Unit 3, statistical tools and interpretation: the arithmetic mean, the median and the mode, correlation with the Karl Pearson and the Spearman measures, and index numbers.
• Unit 4, introduction to microeconomics: micro and macro, positive and normative economics, the central problems, and the production possibility frontier.
• Unit 5, consumer's equilibrium and demand: utility, the law of diminishing marginal utility, the indifference curve, and the demand and its elasticity.
• Unit 6, producer behaviour and supply: production, costs, revenue, the producer's equilibrium, and the supply and its elasticity.
• Unit 7, forms of market and price determination: the perfect competition, the market equilibrium, and the price ceiling and the price floor.

Statistics is the science of collecting, organising, presenting and interpreting numerical data, and in this paper it is the language in which the Indian economy is described. The three units build a single pipeline, you collect the data, you organise it into tables and diagrams, and then you interpret it with a few standard measures.

• Unit 1 fixes the words: the meaning of statistics in the plural and the singular sense, its functions of condensing, comparing, forecasting and policymaking, and its importance to the study of economics.
• Unit 2 fixes the method: primary and secondary data, the census and the sample, the frequency distribution, the bar and pie diagrams, and the histogram, the polygon and the ogive.
• Unit 3 fixes the measures: the arithmetic mean, the median and the mode with their formulas, the correlation of two variables, and the index numbers that trace the price level.

Microeconomics studies the behaviour of a single consumer, a single producer and a single market. The four units move from the consumer to the producer to the market, and the final unit brings the two sides together in the equilibrium of a perfectly competitive market.

• Unit 4 asks the three central questions that every economy must answer, what to produce, how to produce and for whom to produce, and introduces the production possibility frontier and the opportunity cost.
• Unit 5 studies the consumer with the marginal utility analysis and the indifference curve analysis, and then the demand, its shifts and its price elasticity.
• Unit 6 studies the producer with the production function, the costs, the revenue, and the condition of the producer's equilibrium, and then the supply and its elasticity.
• Unit 7 brings the demand and the supply together in a perfectly competitive market, fixes the equilibrium price, and applies the two intervention policies, the price ceiling and the price floor.

The question paper is built out of a small number of question types, and each type has a fixed shape of answer. Once the type is recognised, the format follows, and the chapter becomes a list of answers to prepare rather than a text to read.

• The definition question, which asks for the meaning of a term such as statistics, opportunity cost, elasticity of demand or a bank's creation of money, and the answer should give the definition and then a single sentence of explanation.
• The difference question, which asks for the distinction between two things, such as primary and secondary data, the mean and the median, micro and macro economics, and the movement along and shift in a curve, and the answer must be two parallel points followed by a concluding sentence.
• The numerical question, which asks for the mean, the correlation, the index number, the elasticity or the equilibrium price, and the marks follow the method, so the formula must be written before the substitution.
• The application question, which puts a price ceiling, a price floor or a shift in demand into a market and asks for the effect, and the answer should give the reasoning and the diagram together.

The marks lost in this paper are lost to a small number of predictable errors, and every one of them is a habit that a few sessions of practice can remove.

• Do not confuse statistics in the plural sense, numerical facts, with statistics in the singular sense, the science of handling those facts, because the two-sense question is a favourite one-marker.
• Do not say the median is the arithmetic centre or the most frequent value, because the median is the middle value of the ordered series and the mode is the most frequent, and the two must never be swapped.
• Do not confuse a shift of a curve with a movement along it, a shift is caused by a change in a non-price determinant and a movement by a change in price alone.
• Do not call the price floor a lower bound, because a price floor is fixed above the equilibrium and a price ceiling below it, and the direction is the entire point of the policy question.
• Do not write the elasticity answer without the sign, because the price elasticity of demand is conventionally negative and the examiner expects that sign or a statement that it is taken in absolute value.
• Do not leave the economic interpretation out of a statistical numerical answer, because the interpretation line is a stated requirement of the syllabus.

The revision strategy follows the split of the paper. The statistical units are best revised with a formula card and a set of worked numbers, and the microeconomic units with a definition sheet and a diagram folder.

• Write the formulas of the mean, the median, the mode, the Karl Pearson coefficient, the Spearman coefficient and the index number on one card, and revise the card before every test.
• For each microeconomic unit, write the definitions of its five or six key terms, the condition of the equilibrium, and the diagram that goes with it, on a single sheet.
• Practise the numerical questions in Part A in timed conditions, because one unfamiliar formula can stall a whole question in the real paper.
• For every difference question, write the two columns and the concluding sentence, because the conclusion is a separate mark that is almost always left out.
• Then close the book and write the definitions from memory, and check them against the page, because the writing is the revision and the reading is only the first pass.