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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 A

Firm B

No. of wage earners

586

648

Mean of monthly wages

Rs 5253

Rs 5253

Variance of the distribution of wages

100

121

(i) Which firm A or B pays larger amount as monthly wages?

(ii) Which firm, A or B, shows greater variability in individual wages?

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Solution

(i) Monthly wages of firm A = Rs 5253

Number of wage earners in firm A = 586

∴Total amount paid = Rs 5253 × 586

Monthly wages of firm B = Rs 5253

Number of wage earners in firm B = 648

∴Total amount paid = Rs 5253 × 648

Thus, firm B pays the larger amount as monthly wages as the number of wage earners in firm B are more than the number of wage earners in firm A.

(ii) Variance of the distribution of wages in firm A = 100

∴ Standard deviation of the distribution of wages in firm

A ((σ1) =

Variance of the distribution of wages in firm = 121

∴ Standard deviation of the distribution of wages in firm

The mean of monthly wages of both the firms is same i.e., 5253. Therefore, the firm with greater standard deviation will have more variability.

Thus, firm B has greater variability in the individual wages.


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