Numeracy - Study Skills

Study Skills

Numeracy

Numeracy is one of the Key Skills. Both Economics and Business Studies, by their very nature, demand a certain degree of numerate ability and current specifications all require data handling skills to be demonstrated by students.

Extract from subject core for Business Studies - application of number

  • When recording data, students should:
    • organise and record it fully and accurately
  • When processing data, students should:
    • make decisions about which data and calculations to use for the task
    • carry out calculations to appropriate levels of accuracy
    • check calculation, allow for possible errors and minimise their effects
  • When interpreting and presenting findings, students should:
    • select and use appropriate techniques to present clearly the main features of their findings, to appropriate levels of accuracy
    • describe and interpret their findings, allowing for possible sources of error

NB. During an A level Economics/Business Studies course you will only be expected to use the techniques you mastered for GCSE Mathematics. However, it is surprising how lack of practice can make you rusty!

How to improve your technique: some mathematics to master!

Whilst the following is by no means an exhaustive list, it highlights areas where mistakes frequently occur.

  1. Percentages
    • % change causes problems
      It is the change divided by the first number x100
       
      e.g.    % change in price  from 1996 to 1997
                 1997              £20
                 1996              £25
                Answer:   Change = -£5    First no. is 1996 (£25)
                         %Change = -£5  x 100
                                    £25
                                 = - 20%
      
  2. Averages
    • Make sure you know the difference between
      • The Arithmetic Mean (Average)
      • The Mode (Most frequently occurring)
      • The Median (Middle or 50% number)
         
        e.g.  4  4  5  8  9  12  18
         
        Mean = 60 = 8.6
                7
        Mode  = 4
        Median= 8
        
    • Know when to use each
  3. Graph work
    • Remind yourself of different types of graph - especially the difference between a Bar Graph and a Histogram
    • The Divided Bar Graph is frequently used - check it!
    • Gradients - increasing, decreasing, positive, negative and constant. Sketch these!
    • Trends - even though a line graph may have peaks and troughs, the start and finish gives the overall trend.
    • Moving Averages smooth out 'freak' results - Business Studies students may well be examined on this
    • Forecasting - the line of best fit and extrapolation will give a rough estimate but Business Studies students would be expected to use a moving average first, followed by some variance analysis.
    • Equation of a straight line - know it and use it!
  4. Algebra
    • Use it! It can be helpful in solving arithmetical problems e.g. If £1 = $2 and £1 = 10F, What does $1 equal in francs?
       
                   £1 = $2    ......... (1)
                   £1 = 10F   ......... (2)
      (1) in (2),  $2 = 10F
              so,  $1 = 10F  = 5F
                         2
      
    • Simultaneous equations - Economists will need this technique for the Multiple Choice paper e.g. Let c = consumption, I = investment, X = exports M = imports, Y = national income of an economy with no government sector. If c =10 + 0.8Y , I = 70, X = 120 and M = 100, what will be the equilibrium level of Y? Answer:
       
                   E = C + I + (X-M)  ............(1)
                   C = 10 + 0.8Y      ............(2)
        (2) in (1) E = [10 + 0.8Y] + I + (X-M) ...(3)
        At eqm.    Y = E              ............(4)
        (4) in (3) Y = [10+ 0.8Y]+ I + (X-M) .....(5)
                so,Y = 10 + 0.8Y +70 + (120-100)
                   Y = 100 + 0.8Y
            Y - 0.8Y = 100
                0.2Y = 100
                   Y = 100 = 500
                       0.2
      

The key to numerical competence is confidence and confidence is gained through practice - you can't 'swot up' on mathematical techniques. The only way to improve is by regularly using the numerical skills you have acquired lower down in school.

You may also like to have a look at the TimeWeb section on Biz/ed which has a mass of helpful advice on using data in economics and business.