Question

The distribution of income in some Third World countries is considered wedge-shaped (many very poor people, very few middle-income people, and even fewer wealthy people). Suppose we pick a country with a wedge-shaped distribution. Let the average salary be $2,000 per year with a standard deviation of $8,000. We randomly survey 1,000 residents of that country.

a) True
b) False

Answer 1

The given statement is false.

Therefore, correct anser is b) False

Step-by-step explanation:

The statement is false. In a wedge-shaped income distribution, where there are many very poor people, very few middle-income people, and even fewer wealthy people, the mean (average) may not accurately represent the typical income. The average salary of $2,000 per year might be influenced significantly by the large number of very poor people, and the standard deviation of $8,000 indicates considerable variability, highlighting the skewed nature of the distribution. In such cases, the mean alone might not provide a comprehensive understanding of the income distribution.

Understanding the limitations of using the mean as a measure of central tendency is crucial, especially in skewed distributions. In situations like a wedge-shaped income distribution, additional statistical measures, such as the median, might offer a more representative measure of the typical income.

Therefore, correct anser is b) False