An analysis of monthly wages paid to workers in two firms A and B, bel

1.	An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results.ABNo. of wage earners586648Mean of monthly wages (Rs )52535253Variance of the distribution of wages100121 (i) Which firm A or B pays larger amount as monthly wages? (ii) Which firm A or B shows greater variability in individual wages?
Answer» (i) Amount of monthly wages paid by firm A. = 586 x mean wages = 586 x 5253 = Rs.3078258 And amount of monthly wages paid by form B = 648 x mean wages = 648 x 5253 = Rs. 3403944. Clearly, firm B pays more wages. Alternatively, The variance of wages in A is 100. ∴ S.D. of distribution of wage in A = 10 Also the variance of distribution of wages in firm B is 121. ∴ S.D. of distribution of wages in B = 11. since the average monthly wages in both firms is same i.e., Rs. 5253, therefore the firm with greater S.D. will have more variability. ∴ Firm B pays more wages. (ii) Firm B with greater S.D. shows greater variability in individual wages.

An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results.ABNo. of wage earners586648Mean of monthly wages (Rs )52535253Variance of the distribution of wages100121 (i) Which firm A or B pays larger amount as monthly wages? (ii) Which firm A or B shows greater variability in individual wages?

Answer»

(i) Amount of monthly wages paid by firm A.

= 586 x mean wages

= 586 x 5253 = Rs.3078258

And amount of monthly wages paid by form B

= 648 x mean wages = 648 x 5253 = Rs. 3403944.

Clearly, firm B pays more wages.

Alternatively,

The variance of wages in A is 100.

∴ S.D. of distribution of wage in A = 10

Also the variance of distribution of wages in firm B is 121.

∴ S.D. of distribution of wages in B = 11.

since the average monthly wages in both firms is same i.e., Rs. 5253, therefore the firm with greater S.D. will have more variability.