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Question

An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results:

Firm AFirm BNo. of wage earners586648Mean of monthly wagesRs.5253Rs.5253Variance of the distribution of wages100121

(i)Which firm spends larger amount as monthly wages?

(ii)Which firm shows greater variability in individual wages?

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Solution

(i) Firm A: Number of wage earners (n1) = 586

Mean of monthly wages (¯x1) =Rs. 5253

Total money wages = Rs. 5253 × 586 = Rs. 3078258

Team B: Number of wages earners (n2) = 648

Mean of monthly wages (¯x1) = Rs. 5253

Total money wages = 5253 × 648 = Rs. 3403944

So, Firm B spends larger amount as monthly wages.

(ii) Since, both the firms have same mean wages, so the firm with greater variance will have more variability in individual wages. Thus, firm B will have more variability in individual wages.


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