An analysis of monthly wages paid to workers in two firms A and B, belonging to the same industry, gives the following results:
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?
1 Answers
(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 (σ12 ) = 100
∴ Standard deviation of the distribution of wages in firm
A (( σ1 ) = √100 = 10
Variance of the distribution of wages in firm = B ((σ22 )) = 121
∴ Standard deviation of the distribution of wages in firm B (σ22 ) = √121 = 11
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.