BASIC TOOLS OF ECONOMICS ANALYSIS

Economics as a subject uses different tools for economic analysis of figures, names, dates and
quantitative information. Some of these tools include table, charts, graphs, mean, median, and mode
etc.

TABLE: It is an orderly arrangement of information, facts or data using rows and columns for
presentation which makes it easier for better understanding.

Example of a table. The table below represents the number of bags of beans demanded in relation to
price.

Numbers of bags of beans demanded in Imo state in 2017

Price N Number of bags of beans demanded

2000 800

4000 600

6000 300

9000 150

10,000 50
From the table above, it can be
seen that the number of bags of beans demanded at a given price varies. When the price was low
(N2000) more bags of beans was demanded that when the price was high (N 0,000).

CHARACTERISTICS OF A TABLE

i. It must be simple
ii. It must easy to understand
iii. Must have a title or heading
iv. Its unit of measurement must be stated
v. Purpose of construction must be stated
vi. Sub-heading for the column and rows used must be stated
vii. It must be numbered if they are many
viii. Source of information must be stated if it is known.
IMPORTANCE OF TABLES

i. Help to summarize the data presented

ii. Assist in the orderly arrangement of data
iii. It ease comparison between different classes of data
iv. It helps to bring out important features in the data
v. It helps to understand a data
vi. It helps to make decision easily and faster

GRAPHS

A graph can be defined as a diagram showing a functional or statistical relationship between two
variables.

Information presented on a table can be translated into graph for better understanding.

Types of graphs

1. Line graph
2. Bar graph
3. Pictograph
4. Pie graph

FEATURES OF GRAPH

1. It must have a title

2. It must have scale
3. Should have X (Horizontal) and Y (Vertical) axis
4. It must be properly labeled
5. It must show the sources of the data presented
6. The unit of measurement must be indicated
7. The X and Y axis must carry different variables.

IMPORTANCE OF GRAPH

1. It helps to show the relationship between two variables

2. It provides basis for company variables in a table
3. It helps to interpret value of variables
4. Values or quantities in the table are better understood and appreciated
5. It makes it possible for changes in variable to be expressed
 6. It gives clearer and quicker impression about quantitative information illustrated in table form.

LINE GRAPH: This is used to connect the highest and lowest points of a group of data. It could be
straight or curved

Example: The table below shows the numbers of cartons of sugar produced by Dangotecompany in
2017 for five months

Months Number of cartons of sugar produced

January 10

February 15

March 20

April 25

May 30

Present the above information in a line graph

Scale: let 1cm represent 0 carton

PIE CHART OR GRAPH

A pie chart is a simple circle of any convenient size which is divided into sections or sectors, each of
which is proportional to the quantity or value it represent.

HOW/METHOD OF CONSTRUCTING PIE CHART

 1. Add the total figure or value under consideration
2. Work out the percentage or degree of the total which each component part represent
3. Drawn circle of any convenient sixe
4. Divide the circle into sector subtended by these angles
5. Write the percentage or degree of each sector by it.
6. Use key where the information cannot be written inside the circle.

Example:

The table below shows the age distribution of a hypothetical population of a country.

Age group Number of people (population)

0-19 (under 19) 70

20-29 49

30-59 31

60 and above 25

Represent the above information in a pie chart, show your work clearly both in percentage and in degree.

Solution

Add up the total number of people or population i.e. 70+49+31+25 = 175

TABLE
i.e. 40% + 28% + 177% + 14.3% = 100%

use protractor for your drawing

Assignment

The table below shown the sectoral allocation of a country’s resources

Sectors Amount (N million)

Education 25

Power 18

Agriculture 20

Health 17

Housing 20

Present the above in a pie chart, show your working both in degree and in percentage
BAR CHART OR GRAPH

Is a graph made up of bars of rectangles which are of equal width and whose lengths are proportional
to the qualities they represent.

TYPES OF BAR CHART

There are three major types of bar charts. These are

i. Simple bar chart

ii. Component bar chart
iii. Multiple bar chart
1. Simple Bar Chart: This involves the representation of tabulated data with evenly spaced bars
separated by gaps with the lengths proportional to the value given. It is used when the data is
made up of only item or variable.
Example: The table below shows the product of rice in Ogun state between 2011 and 2016

Year Rice production

2011 5000

2012 7000

2013 3000

2014 4500

2015 1500

2016 8000

Solution

Year Cocoa production

2011 5.0

2012 7.0
 2013 3.0

2014 4.5

2015 1.5

2016 8.0

NOTE: The figure can be reduced when divided by 1000

Scale: Let 1cm represent 1000 tones.

2. Compound Bar Chart: This is used when the data involved are of two variable

NOTE:

- In drawing this bar chart, the length of the bars must be proportional to the total value of each
class of data being represented
- Each bar is then divide into various segments that make up the component.

Example

The table below shows the population of male and female in some area councils in Abuja.
 Area council Male Female Total

Bwari 90 50 140

AMAC 50 60 110

Gwagwalada 70 25 95

Kwali 40 80 120

Present the above information in a component bar chart.

Solution

Scale: Let 1cm represent 2

Multiple bar Chart: It is used when there are three or more variables in a given data. It has multiple bars
each of which stand for a component variable.

Example: the data below shows the export of yam from three states from 2015-2017

States 2015 (Tones) 2016 (Tones) 2017 (Tones)

Benue 40 50 50

FCT 20 40 60

Niger 30 50 60

Present the above information in a multiple bar chart

Solution:

Let 1cm represent 10 (tones)

PICTOGRAM OR PICTOGRAPH

These are charts in which pictures or drawings of objects are used to represent items in a given data.

- The pictures so used are meant to represent the magnitude of the variables
- The pictures are drawn to a definite scale to represent a given value of data.
Example: The table below shows the number of people who graduated from G.S.S Kubwa between
2014 and 2018

Year Number of Students

2014 500

2015 700

2016 300

2017 700

2018 900

Solution:

- The diagram must look like a person

- Let one picture represent 100

Pictogram showing the number of students who graduate from G.S.S Kubwa between 2014 and 2018