Question

You look at real estate ads for houses in Naples, Florida. There are many houses ranging from $200,000 to $500,00 in price. The few houses on the water, however, have prices up to $15 million. The distribution of the prices will be:______.

a) skewed to the left.
b) roughly symmetric.
c) skewed to the right.
d) unimodal.
e) too high.

Answer 1

c) skewed to the right.

Explanation:

We need to remember that is a distribution is skewed to the right then we have the following condition satisfied:

`Mode< Median<Mean`

And if is skewed to the left then we have:

`Mean <Median < Mode`

If the distribution is symmetric we need to satisfy:

`Mean = Median=Mode`

For this case since we have most of the values between 200000 and 500000 when we put atypical values like 15000000 that would affect the sample mean and on this case the sample mean would larger than the sample median because the median is a robust measure of central tendency not affected by outliers.

So for this special case we can say that the
`Mean>Median`. And probably the median would be higher than the mode so then we can conclude that the best answer for this case would be:

c) skewed to the right.