Unit 4 Ch 1 : Development — Social Studies STD 10 — Question

Averages are used because to classify the countries based on only their total income is not correct as different countries have different populations. However, calculations based on average income have its own limitation because it does not tell us about whether the distribution of income in a country is distributed equally or unequally.
For example, there are two countries X and Y with five citizens each. Following table tells us about the income of these citizens.

Country	Citizen A (Monthly income in Rs)	Citizen B (Monthly income in Rs)	Citizen C (Monthly income in Rs)	Citizen D (Monthly income in Rs)	Average Income
X	20,000	2,000	1,000	1,000	Rs. 6,000
Y	2,000	3,000	3500	3500	Rs. 3000

In the above example, the average income of country X and Y is Rs. 6000 and Rs. 3,000 respectively. But we see that while the average income of country X is the double of country Y, there is more disparity of income in country X than in country Y.