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Question -

Average daily wage of 50 workers of a factory was ₹ 200 with a Standard Deviation of ₹ 40. Each worker is given a raise of ₹ 20. What is the new average daily wage and standard deviation? Have wages become more or less uniform?



Answer -

N = 50
σ = 40
Average wage =
So, total wages = 200 × 50 = ₹ 10,000
Now, increase in wage rate = ₹20
Total raise = 50 × 20= ₹ 1,000
Total wage after raise = ₹ 10,000 + 1,000 = ₹ 11,000
New average wage = 
Thus, Mean increases by the amount of increase in wage of each worker as the absolute increase was equal for all.
Standard Deviation will remain the same that is ₹40 as Standard Deviation is independent of origin and hence addition of equal amount in all the values will not cause any change in the Standard Deviation.
Uniformity of wages can be seen by coefficient of variation.
Previously, the coefficient of variation was
The new coefficient of variation after wage increase is given by
This shows that wages have become more uniform now as the new CV is lower.

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