3. 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\hspace {1mm} 5253

Rs\hspace {1mm} 5253

Variance of the distribution of wages

100

121

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

Answers (1)

Given, Variance of firm A = 100

Standard Deviation = \sigma_A = \sqrt{Variance}= \sqrt{100} = 10

Again, Variance of firm B = 121

Standard Deviation = \sigma_B = \sqrt{Variance}= \sqrt{121} = 11

Since \sigma_B>\sigma_A, firm B has greater variability in individual wages.

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