Question

6. Why do we use averages? Are there any limitations to their use? Illustrate with
your own examples related to development.​

Answer 1

Answer:

w use average for following:

1). it indicates the distribution of total income amongst the total population of the countary.

2) it is easy to calculate& understand.

3). it helps in comparison amongst different countaries based on their income & population.

Following are the limitation to use of average:

1) it does not indicate the difference & distribution of income among rich & poor people.

2). it does not show the health status & the lwvel of education available to thepeople of the countary.

3(. it is too easy to understand but it ignores a lot of qualitive factors of the econamy like ,law & order ,defence ,discipline of the people , etc

Answer 2

We use averages because they are useful for comparing differing quantities of the same category.

For example, to compute the per capita income of a country, averages have to be used because there are differences in the incomes of diverse people. However, there are limitations to the use of averages. This does not show the distribution of thing between people. For an example, suppose in a country, the annual income of a rickshaw puller is Rs 8,000 while an MNC employee earns an annual package of Rs 12,00,000. The average income of this country, therefore, will be Rs 6,05,000. Here actual income or status remains unknown. One can clearly consider this as a rich country thereby ignoring the income disparity between two individuals. Averages are useful for comparison, they also hide disparities.