1. Direct Method

In this method, the formal definition of mean is used. The values of items are simply summed and divided by the number of observations.

Mean=∑X÷N

The formula for the direct method is as follows:

Mean= ∑fX/∑f

Here, ∑fX= Summation of the product of values of items with their corresponding frequencies

∑f= Summation of all the frequencies

Labour-intensive production

In Economics, labour is the all human efforts in the production. Labour does not only mean the labourers in an industrial site. If we take an example of a tourist resort, labour includes the receptionists, bell boys, bartenders, waiters, admin assistants, telephone operators etc.

Labour-intensive production means that the way that a good or service is produced depends more heavily on labour than the other factors of production, such as capital.

Labour intensive method of production is usually used for individual or personalised products, or to produce on a small scale.

Examples of labour-intensive production are hotels, restaurants, small scale farming, pole-and-line fishing, mining etc.

Capital-intensive

‘Capital’ refers to the equipment, machinery, vehicles and so on that a business uses to make its product or service. This meaning is also consistent with the meaning that the capital is the resources provided by the owner/owners to the business to do the business.
Capital-intensive processes are those that require a relatively high level of capital investment compared to the labour cost.
These processes are more likely to be highly automated and to be used to produce on a large scale.
An industry that is capital intensive is – oil refining, manufacturing.

Economics is a science that studies human behavior which aims at allocation of scarce resources in such a way that consumer can maximise their satisfaction, producers can maximise their profits and society can maximise its social welfare. It is about making choice in the presence of scarcity.

Father of Economics Adam Smith provided wealth definition of economics( Book- The Wealth of Nations, 1776):- Economics is an enquiry into the factors that determine the wealth of a country.

The law of variable proportions state that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline. This means that up to the use of a certain amount of variable factor, marginal product of the factor may increase and after a certain stage it starts diminishing.
Assumptions of Law of Variable Proportions:
1. Constant State of Technology: First, the state of technology is assumed to be given and unchanged. If there is improvement in the technology, then the marginal product may rise instead of diminishing.
2. Fixed Amount of Other Factors: Secondly, there must be some inputs whose quantity is kept fixed. It is only in this way that we can alter the factor proportions and know its effects on output. The law does not apply if all factors are proportionately varied.
3. Possibility of Varying the Factor proportions: Thirdly, the law is based upon the possibility of varying the proportions in which the various factors can be combined to produce a product. The law does not apply if the factors must be used in fixed proportions to yield a product.

Scarcity: Refers to limited supply of resources in the economy in relation to demand, this is due to the unlimited wants of human beings.
 

The curve depicts the law of demand. It slopes downward to the right. It has a negative slope. The negative slope of the demand curve shows the inverse relationship between the price of commodity and its quantity demanded. It shows that demand for commodity increases with the decrease in its price and it decreases with the rise in its price. Downward movement on the demand curve shows fall in price and rise in demand .

Production Possibility Curve (PPC) also known as Production Possibility Frontier (PPF) is a graphical representation of all the possibile combinations of two goods that can be produced in an economy given the available resources and technology.

The two main characteristics of PPC are:

1. Slopes downwards to the right: PPC slopes downwards from left to right. It is because in a situation of fuller utilisation of the given resources, production of both the goods cannot be increased simultaneously. More of commodity A can be produced only with less production of commodity B.
2. Concave to the point of origin: It is because to produce each additional unit of commodity A, more and more units of commodity B will have to be sacrificed. Opportunity cost of producing every additional unit of commodity A tends to increase in terms of the loss of production of commodity B. Production will act upon the law of increasing marginal opportunity cost.

The results and outcomes of the statistical methods can only be interpreted in their true and correct sense only by its experts. An unqualified person will not be informed with all the technicalities involved in the real life application of that method and will not be able to consider all the aspects of the situation before giving his conclusive remarks. This may lead the organisation to wrong decisions regarding its operations, which is turn, may ultimately result in huge losses for the organisation. Therefore, it is always advised that statistical tools must only be used by the competent and qualified people who the the applicability and technicalities of the statistical methods to give correct conclusions.

The results and outcomes of the statistical methods can only be interpreted in their true and correct sense only by its experts. An unqualified person will not be informed with all the technicalities involved in the real life application of that method and will not be able to consider all the aspects of the situation before giving his conclusive remarks. This may lead the organisation to wrong decisions regarding its operations, which is turn, may ultimately result in huge losses for the organisation. Therefore, it is always advised that statistical tools must only be used by the competent and qualified people who the the applicability and technicalities of the statistical methods to give correct conclusions.

Budget Set:

Budget set refers to the attainable combinations of a set of two goods, given prices of the goods and income of the consumer.   A budget set is based on the assumptions that income of the consumer and the prices of two goods (consumed by the consumer) remain unchanged. Accordingly, a change, either in prices or in consumer's income will lead to a change in the budget set.

Budget Line: 

A budget line is a line that shows the maximum amount of good-X or of good-Y (or the possible combinations of X and Y) that the consumer can buy, given his money income and the prices of the goods X and Y. It is also called Price Line, as it shows the price ratio between good-X and Good-Y, or the rate at which one good can be exchanged for the other, given prices of the two goods in the market.  The position of the budget line depends on the income of the consumer and prices of the two goods. If prices of two goods remain unchanged, then with an increase in income, budget line of the consumer shifts to the right. Similarly, if income of the consumer remains unchanged, the budget line will shift to the right when there is a proportionate fall in the prices of both goods X and Y. Thus, if the prices of both X and Y are reduced to half, the budget line will shift to the right showing twice the possible purchase of X and Y than before.

Positive economics describes the matter of the presence of a theory with proven facts and figures that needs to be taken into account before developing the theory. For example, Law of demand where the theory is derived with proven facts.

Normative economic is based on beliefs that are supported by valued judgement which is better for the nation's economic future as well as leads to social welfare. For example, belief that income should be distributed evenly in the economy.