In the sleepy community of Wisteria Lane, there are six households, each of which earns $40,000 per year. Suppose that a new resident, with an income of $4 million per year, builds an ostentatious mansion in the community. After the new resident moves in, the median household income has _____, and the mean household income has _____.

Question

Quizplus · Accepted Answer

The median income remains the same because it is the middle value, and adding one high income does not change the middle value in a list of incomes that were all the same. However, the mean (average) income increases because the sum of all incomes is now significantly higher due to the addition of the $4 million income, divided by the now seven households.

In the Sleepy Community of Wisteria Lane, There Are Six