Theory question 104
Tools of Economic AnalysisSection B
What is the mode and when is it a suitable average to use? State its disadvantages.
Show the model answer
Model answer
Mode: the value that occurs most often (has the highest frequency) in a set of data. E.g. in 2, 3, 3, 5, 3, 7 the mode is 3.
Suitable when: we want the most common or typical item (e.g. the most popular shoe size or price); data are non-numerical (qualitative); there are extreme values that would distort the mean; a quick estimate is needed.
Disadvantages: a set may have no mode or more than one mode; it ignores the other values; not useful for further mathematical work; may be unrepresentative with small samples; unstable when data change.
Explanation
Define with an example, then uses, then disadvantages.