In July 2013, the unemployment rate in California was 8.5%, that of Oregon was 7.9%, and that of Washington State was 6.8%.(Keep in mind that California is by far the most populous of the three states).If a simple, rather than weighted, average were used to estimate the overall unemployment rate across the three West coast states, the resulting value would be:
A)an underestimate of the true unemployment rate across the three states.
B)an accurately estimate of the true unemployment rate across the three states.
C)an overestimate of the true unemployment rate across the three states.
D)the direction of the bias of the estimate cannot be determined.
E)none of the above

Question

Quizplus · Accepted Answer

Using a simple average to estimate the overall unemployment rate would not account for the varying populations of the states, leading to an underestimate because the state with the highest unemployment rate (California) also has the largest population.

In July 2013, the Unemployment Rate in California Was 8