Question

After settlement, the average weekly wage in a factory had increased from Rs. 8 to 12and standard deviation had increased from Rs. 1 to 1.5. The wages have become higher and more uniform, after settlement. Comment.​

Answer 1

Given: After settlement, the average weekly wage in a factory had increased from Rs. 8 to 12 and standard deviation had increased from Rs. 1 to 1.5  

To find: Whether the statement 'The wages have become higher and more uniform, after settlement' is correct or not?

Solution:

• Now we know the formula of coefficient of variation, that is:
• Coefficient of Variation = (Standard deviation /Mean) x 100 %
• Now we have given earlier average weekly wages as 8.
• So mean is 8 and standard deviation is 1.
• So the coefficient of variation will be:

                     = (1/8) x 100  

                     = 12.5 %

• Now after settlement,  we have given that average weekly wages as 12.
• So mean is 12 and standard deviation is 1.5
• So the coefficient of variation will be:

                     = (1.5/12) x 100  

                     = 12.5 %

• Now we can see that 12 > 8

• So the wages have become higher. But the coefficient of variation is same so no impact on uniformity, so wages have become more uniform is not correct.

Answer:

              So the correct statement is wages have become  higher.