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Question 2 of 10
The chart gives the income distribution of Sambala, an island nation in the arctic ocean.
| Annual income | |
|---|---|
| Ken | $35000 |
| Leo | $47000 |
| Michael | $65000 |
| Marion | $500000 |
| Joseph | $55000 |
| Ellen | $42000 |
| Tom | $63000 |
What is the mean income in Sambala?
mean: $
What is the median income in Sambala?
median: $
Which measure is most appropriate for understanding the income situation of the majority of the citizens in Sambala, and why?
The mean is the most appropriate measure, because it incorporates every individual in the economy.
The median is the most appropriate measure, because it reduces the effects of outliers.
Both are equally valid because they produce a single monetary measure.
Neither is valid because neither considers the spending levels of citizens in Sambala.
(a) Mean income = Total Annual Income / Total Number of People.
Total Annual Income = 35000 + 47000 + 65000 + 500000 + 55000 + 42000 + 63000 = 752000
Total number of people = 7
Mean Income = 752000 / 7
Mean Income = $107428.57
(b)
| Annual Income | |
| Ken | 35000 |
| Ellen | 42000 |
| Leo | 47000 |
| Joshep | 55000 |
| Tom | 63000 |
| Michael | 65000 |
| Marion | 500000 |
First arrange the series in asscending order (smallest to larger)
median income = [(n+1)th/2] position
median income =(7 + 1) / 2
Median income = [(n+1)th / 2 ] Position
Median income = 4th income position.
Median income = 55000
Median is the most appropriate measure for understanding income situation of the majority of the citizens of Sambala, because it reduces the effect of outliers. If we take mean, we would overestimate the income situation.
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