Data on the amount of money made in a year by 1,000 families in a small town were collected. You want to know how much each family will get if the money made by all the 1,000 families is pooled together and then evenly redistributed back to them. Which of the following would you compute?
A) Arithmetic mean
B) Median
C) Interquartile range
D) Coefficient of correlation

Question

Quizplus · Accepted Answer

The arithmetic mean is the best choice for calculating the amount each family would receive if the money is evenly redistributed. It is calculated by adding up all the incomes and dividing by the total number of families. This will give the average amount, which can be used to distribute the money equally among all families. The median and interquartile range do not provide information on the total amount of income or how it should be distributed, and the coefficient of correlation is not relevant in this scenario.

Data on the Amount of Money Made in a Year