Question

6. Why do we use averages? Are there any limitations to their use? Illustrate with
your own examples related to development.
[Economics, Class 10 (NCERT ch- 1)]​

Answer 1

Explanation:

Different countries have a different population, so calculating the average helps in getting an estimated answer which can be used to compare different things at different levels. There are limitations of calculating averages because we cannot know the difference in the income of the people and the unfair distribution of income in a country or state.

For example, if we calculate the per capita income of two countries A and B with 5 people each, the salary of five people in country A is Rs.23,000, Rs.22,000, Rs.23,500, Rs.28,000 and Rs.25,000 and the income of people living in country B are Rs.1,50,000, Rs. 22,000, Rs.50,000, Rs.4000, Rs.2500. The average income of country A will be Rs.24,300 and that of country B will be Rs.45,700. This proves that the average of country B is higher than that of country A, and yet there is a disparity in the income distribution of country B and the income is evenly distributed in country A.

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Answer 2

Answer:

We use averages as they are useful for comparing differing quantities of the same category. ... There are limitations of calculating averages because this does not give any information about the distribution of a thing between people.