Measures of Dispersion

The measures of central tendency do not always show the real picture. Take for example, the following numbers

35, 35, 35, 35, 35

and

20, 25, 30,45, 55

The mean of both the series is 35. That is 35 is representative of both the series. However, there is variability in data. In the first series, all the values are equal to 35, in the second one, they vary and none of the values is 35. So, we say that dispersion or variability exists. We can find this dispersion amongst the values and between the values and the mean. The methods to find them are the measures of dispersion. They are

1. Range

2. Quartile Deviation

3. Mean Deviation

4. Standard Deviation

5. Lorenz Curve

Consumer's Equilibrium using Marginal Utility Analysis

The Law of Diminishing Marginal Utility It has been observed that the desire to consume a commodity decreases as more and more units of that commodity are consumed. Therefore, every successive unit of the commodity consumed provides lesser utility than before. The Law of Diminishing Marginal Utility states that as more and more units of a commodity are consumed, the Marginal Utility derived from every successive unit of the commodity declines. This happens because psychologically, as a consumer starts to consume one unit of the good after another, the the consumers satisfaction reaches a saturation point. So, with every successive unit consumed, the additional utility the consumer derives goes on declining. Consumer's Equilibrium using Marginal Utility: Cardinal Analysis Consumer's equilibrium is that level of consumption at which the consumer is getting maximum satisfaction (benefit) while spending out of his given income across different goods and services, and has no tende

What are Consumer Goods, Capital Goods and Intermediate Goods? With Examples

Consumer Goods, Capital Goods, Intermediate Goods After the production of a good or service, the next aim of the producer is to sell the good to the consumer. The consumer can be an individual or a firm; and the good when sold to the consumer can be consumed as it is or the good can be transformed into another good with the help of a productive process such as a machine. For example, when wheat is sold to a flour mill, it is converted into flour through the use of machinery. When a good is transformed into another good like in the case of wheat, it loses its specific characteristic during the production process. Such type of a good is known as intermediate good. When the goods are not further transformed into other goods, and are used as it is, it is known as final goods. So, the final goods are those which do not pass through any further production process or transformation and are used as it is by the consumers. The final goods can be of two types- Consumer goods and Capital

What are Substitute Goods and Complementary Goods

You may find many goods and services which have a close connection with other goods and services, for example, bread and butter, car and petrol, tea and coffee, apples and oranges, pen and ink etc. In these type of goods, the change in the price of one good has an effect on the quantity bought of the other good . These are called related goods. These can be of the nature of substitutes i.e goods which can be used in place of each other; or they can be of the nature of complementary goods which are goods used along with each other. Substitute Goods Substitutes goods are those goods which can be used in place of one another, in the sense that they satisfy the same want of the consumer. Like tea and coffee, apples and oranges etc. Therefore, in case of substitute goods, the change in the price of one good has an impact on the demand for the other good. Taking the example of two goods, tea and coffee, assume that the price of coffee decreases. What effect will it have on the dema

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