statistics annual

Question

15,000 18,000 20,000 25,000 1,025000 Compute the mean annual income.

Compute the median annual income.

Which provides a more appropriate description of the Smiths’ financial position, the mean or the median? Explain.

could you please tell me how I do this? I am going down the pages of book to practice for a test.

Answer 1

in thousands of dollars income

(15+18+25+1025)/4 = (58+1025)/4 = 1083/4 = 270.75 = mean = arithmetic average

= $270,750

median is the arithmetic average of the 2 middle numbers: (18+25)/2 = 43/2 = 21.5

=$21,500

the median would just be the middle number, if the numbers were odd, but 4 is even, so there are two middle numbers. An outlier is often rejected completely, or just not considered representive. 1,025,000 is an outlier. maybe he won the lottery, but that's something not likely to repeat.

the median is considered more representative as the outlier skews the mean to the right

an outlier is often suspicious, considered unreliable, a possible mistake, or sometimes impossible