TOOLS OF ECONOMIC ANALYSIS

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TABLES OR SCHEDULES

A table is a systematic and orderly arrangement of information, facts or data, using rows and columns for presentation which make it easier for better understanding of  the relationship between variables. It serves as the most commonly used tool in Economics for economic analysis.

FEATURES OF A TABLE

  1. It must give an orderly arrangement of data.
  2. It must have a title or heading.
  3. It must be numbered if many.
  4. It must be very simple and easy to understand.
  5. The units of measurement used in the table must be stated.

 

USES OR IMPORTANCE OF A TABLE

  1. It reveals information at a glance.
  2. It avoids repetition.
  3. It makes data easy to understand.
  4. It allows for easy interpretation of data.
  5. It eases comparison between classes of data.

 

EXAMPLES OF A TABLE

The table below gives the performance of four students in an entrance examination.

Students Eng Maths Econs Total
A 60 80 50 190
B 80 40 70 190
C 60 60 80 200
D 40 50 60 150
Total 240 230 260 730

 

EVALUATION

  1. Define Table.
  2. State 3 importance of a table.

 

USE OF A GRAPH

A graph is a diagram showing a functional relationship between two variables. Information presented on table can be translated into a graph for better understanding.  Many types of graphs are used for economic analysis depending on the nature of the data and purpose for which they are intended

 

FEATURES OF A GRAPH

  1. It must be titled.
  2. It must possess appropriate scales.
  3. The y and x axis must carry different variables.
  4. It must show the source of data presented.
  5. The y-axis must be on the vertical side and x-axis on the horizontal side.
  6. It must be well labeled for better understanding.

 

IMPORTANCE OF A GRAPH

  1. It shows relationship between two variables.
  2. It makes quantitative information illustrated in tabular form clearer and quicker impression.
  3. It helps to interpret values of variables.
  4. The values or quantities in the table are better understood and appreciated in graph.
  5. It provides basis for comparing variables provided in the table.

 

EVALUATION

  1. What is a graph?
  2. State five features of a graph

 

USE OF A CHART

A Chart is a device being used to provide us with the interpretation or presentation of data in the form of diagram or picture. In economics, many types of chart are used for economic analysis among which are bar charts and pie chart.

 

BAR CHART

A bar chart is a way of representing tabulated data with evenly spaced bars with equal gap. Bar charts can be of three types

  1. SIMPLE BAR CHARTS: Used for data with one variable
  2. COMPONENT BAR CHARTS: Used for data with two variables
  3. MULTIPLE BAR CHARTS: Used for data with more than two

Example of simple Bar Charts

Score 2 4 6 8 10
Frequency 7 8 9 4 2

Example of Component Bar Charts

Class Boys Girls Total
S. S. 1p 24 18 42
S. S. 1w 17 22 89
Total 41 40 81

                             

Examples of Multiple Bar Charts

Produce line Tunner 2000 200 2002
Cocoa 500 700 200
Cotton 400 300 500
Groundnut 300 400 400

 

EVALUATION

  1. Define the meaning of a chart

2.    Highlight three types of chart

PIE CHARTS

This is a circle divided into sections expressed in degrees with each section proportionate to the frequency or attribute. The circle represents the total data and with the use of a compass and protractor it is drawn

 

Example: In a school the numbers of periods for the subjects are given in a table. Represent the information in a pie chart.

English 9 periods
Mathematics 6 Periods
Science 5 Periods
Others 20 Periods

 

Solution

Subjects Periods Working Degree
English 9 9/40 x 3600 810
Mathematics 6 6/40 x 3600 540
Science 5 5/40 x 3600 450
Others 20 20/40 x 3600 1800
40 3600

 

LINEAR GRAPH

A linear graph is used in comparing between two variables priving a straight-line graph.

Examples

Given that Q = 42 – 2p find the value of Q when p = N1, N3, N5, N7 and N9, where P = Price and Q = Quantities. Represent the information on a line graph

 

Solution

Q = 42 – 21

When

P = N1, Q = 42 – 2 x N1 – 42 – N2 = N40

P = N3, Q = 42 – 2 x N3 = 42 – N6 = N36

P = N5, Q = 42 – 2 x N5 = 42 – N10 = N32

P = N7, Q = 42 x 2 x N7 = 42 – N14 = N28

P = N9, Q = 42 – 2x N9 = 42 – N18 = N24

Price (N)                                             Quantity (Units)

     1                                                                 40

     3                                                                 56

     5                                                                 32

     7                                                                 28

     9                                                                 24

EVALUATION

  1. Write short note on pie chart.
  2. Explain linear graph in 2 paragraph.                                

GENERAL EVALUATION QUESTIONS

  1. Define frequency distribution.
  2. Giving the budget estimate of a state for 2010. Use the information to present a bar chart

Item                                         Amount

Agric                                              70

Sports                                            80

Education                                     110

Health                                            60

Development                                 30

Finance                                            50

  1. Define a pie chart.
  2. Different between a bar chart and a linear graph.
  3. The production of carrot and onion by a farmer in Jos for the years 2002-2005.You are required to represent this data using component bar chart:

Year                      Carrot             Onion             Total

2001                                        40                     30                  70

2002                            30                     20                  50

2003                            30                     40                  70

2004                            20                     40                  60

 

WEEKEND ASSIGNMENT

  1. Data presented in tables are usually arranged as (a) Charts and tables (b) Rows and columns (c) Graphs and rows (d) Pie chart

The Total number of fruits consumed by a family in a year was 720 represented by the pie chart below. Use it to answer questions 2 – 4

  1. The quantity of bananas consumed by the family (a) 60 (b) 120 (c) 200 (d) 240
  2. The sum total of mangoes and oranges consumed by the family was (a) 200 (b) 360 (c) 400 (d)  520
  3. The quantity of carrots consumed by the family was (a) 200 (b) 360 (c) 400 (d) 520
  4. Which of the following tools of economics analysis is used when data contains more than one variable. (a) Graph (b) Symbolical statement (c) Bar chart (d) component bar chart

 

SECTION B

  1. (a). Define i. graph ii. Chart  iii. table

(b).       List four importance of a table?

  1. (a). The daily sales of a department store for one week are as follows:
Days Mon Tue Wed Thur Fri Sat
Sales(N) 1970 1000 3500 2250 1000 2500

Present the above data in a bar charts (use a graph)

(b).       Mrs. Lumi purchased food stuffs as follows:

Meat                             N60

Green rice                     N40

Beans                            N50

Yam                             N70

Plantain                        N70

Present the above information on pie chart

 

See also

BASIC ECONOMIC PROBLEMS OF THE SOCIETY

OPPORTUNITY COST

BASIC CONCEPTS OF ECONOMICS

ECONOMICS AS A SCIENCE

ECONOMICS

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