School of Business Department of Economics

BSTA205
Answer Key of Work Sheet 3

1. Measures of Central Tendency (Location):

 A parameter is a specific characteristic of a population.

 A statistic is a specific characteristic of a sample.

a) Arithmetic Mean:

- Population Mean: the population mean is the sum of all the population values divided
by the total number of population values.
ΣX
μ=
N

- Sample mean: the sample mean is the sum of all the sample values divided by the
number of sample values.
ΣX
X́ =
n

- Properties of the arithmetic mean:

 Every set of interval-level and ratio-level data has a mean.
 All the values are included in computing the mean.
 A set of data has a unique mean. The mean is affected by unusually large or small data
values.
 The arithmetic mean is the only measure of central tendency where the sum of the
deviations of each value from the mean is zero is zero.
Σ ¿)=0

b) Median:
The Median is the midpoint of the values after they have been ordered from the smallest
to the largest.

 If the number of observations n is odd :

Me= X n+1
2

 If the number of observations n is even :

Me= 0.5 (X n + X n +1)

2 2

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 School of Business Department of Economics

- Properties of the median:

 There is a unique median for each data set.
 It is not affected by extremely large or small values and is therefore a valuable measure
of central tendency when such values occur.

c) Mode:
The mode is the value of the observation that appears most frequently.

d) The relative positions of the mean, median and mode:

 Mean=Median=Mode => Symmetric (Zero skewness).
 Mean>Median>Mode (positive skewness).
 Mean<Median<Mode (negative skewness).

2. Measures of Dispersion:

 Why study dispersion?

- A measure of location, such as the mean or the median, only describes the center of the
data but it does not tell us anything about the spread of the data.
- A second reason for studying the dispersion in a set of data is to compare the spread in
two or more distributions.

a) Range = Maximum value – Minimum value.

b) Variance:
(X −μ)2
Population variance: σ 2=
N

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( X− X́)2
Sample variance: S2=
n−1

c) Standard deviation:
2
Population standard deviation: σ = ( X−μ)
N√
2
Sample standard deviation: s= ( X− X́)
n−1√

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 School of Business Department of Economics

Problems

Problem 1
The following values represent the hours per day that a sample of 11 bank employees spend
working on the computers.

4 5 7 4 5 6 3 8 7 5 9
1. Calculate the mean.
Mean: X́ = ∑ X = 4+5+7+4+5+6+3+8+7+5+9 / 11 = 5.72
n
2. What do we call the value computed in part 1? Statistic or parameter?
if the values are sample, statistic mean but if the values are population , parameter mean .
Statistic. It is a sample mean.
3. Calculate the median and mode.
Median: order :3,4,4,5,5,5,6,7,7,8,9 Odd  Median= 5
Mode: 5 (occurs most frequently : 3 times)

Problem 2
The following values represent a population:

3.0 3.4 2.1 3.1 3.7 3.5 3.7 3.1 3.2 3.7

a. Find the arithmetic mean, median and mode.mean= 3+3.4+ 2.1+

3.1+3.7+3.5+3.7+3.1+3.2+3.7/10=3.25
Mean=3.25 Mean= 3+3-4+2-1+……. 3.7/ 10 = 3.25
Median= 3.2+3.4/2= 3.3 2.1, 3.0, 3.1, 3.1, 3.2, 3.4, 3.5 , 3.7, 3.7, 3.7
Mode=3.7

b. Comment on the skewness of the data.

mean< median < mode (data is negatively skewed)

Problem 3
A random sample of students in BSTA205 were selected and their grades (in points) on Exam 1
were reported in the following table.

95 87 65 76 64 59 89 91 76 79
For the distribution above: 59, 64, 65, 76, 76, 79, 87, 89, 91, 95
a- Calculate the mean, median and the mode. Mean= 95+87+etc…./10= 78.1
Median=middle observation=( 76 +79)/2 =77.5 points
59 64 65 76 76 79 87 89 91 95
Mean= sum(X)/n = 78.1 points= 95+87+etc / 10

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 School of Business Department of Economics

Mode= most repeated= 76

b- Compare the mean, median and mode then comment on skewness of the distribution.
Mean>median>mode (therefore distribution skewed to the right or positively skewed)
c- Calculate the Range. Range = max – min = 95 – 59 = 36
Range = 95-59 =36 points
d- Can we consider the range as the best measure of dispersion? Why?
No, because the Range does not take into account all the values of the distribution and it is
extremely affected by outliers.
e- Calculate the variance and standard deviation. (Show your calculations)
X X- X́ (X- X́ )²
95-78.1=
95 16,9. 16.9 =285.61
16.9
87-78.1=
87 = 8.9 .8.9 = 79.21
8.9
=64-
= (-14.1).(-14.1)=
64 78.1=
198.81
-14.1
76 -2.1 4.41
65 -13.1 171.61
59 -19.1 364.81
89 10.9 118.81
91 12.9 166.41
76 -2.1 4.41
79 0.9 0.81
Total   1394.9

Variance = 1394.9/9 =154.98

Standard deviation= √ variance =√ 154.98=12.4491

Problem 4

Given a sample data set showing the student ages in an economics class:
Section A: 18, 18, 21, 17, 19, 20, 22, 19, 18, 30

a- Calculate the mean.

18+18+21+17+19+20+ 22+19+ 18+30
Mean = = 20.2
10
b- What is the median?
19+19
Median: 17, 18, 18, 18, 19, 19, 20, 21, 22, 30  median is = 19
2
c- Calculate the mode and the range.
Mode =18.
Range = max – min = 30 -17 = 13

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 School of Business Department of Economics

d- Comment on the skewness.

Mean >Median>Mode => positively skewed.
e- Calculate the variance and standard deviation.
Section A: variance = 14.1 and standard deviation = 3.75.

X x-xbar x-xbar square

18 18-20.2= -2.2 4. 84
18 -2.2 4.84
21 21-20.2= 0.8 0.64
17 17-20.2= -3.2 10.24
19 19-20.2= -1.2 1.44
20 20-20.2= -0.2 0.04
21 21-20.2= 0.8 0.64
22 22-20.2= 1.8 3.24
30 30-20.2= 9.8 96.04
18 -2.2 4.84
Total 126.8

Variance = 126.8 / n-1= 126.8 /9 = 14. 1

Standard deviation = √ variance=3.75

Problem 5
Consider the two following samples:
Data Set 1 represents the number of professional in 6 accounting firms in Beirut.
Data Set 2 represents the number of professionals in 5 accounting firms in Tripoli.
Data Set 1 Data Set 2
7 6
15 8
12 9
5 13
13 9
18
Compute then compare the following measures for each data set: Mean, Median, Mode, Range,
Variance, Standard Deviation.
Data set 1: data set 2
Mean = 11.67 9 mean = 9
Median = 12+13/2= 12.5 9 median = 9
Mode= no mode 9 mode= 0
Range= 18-5= 13 7 range = 7
Variance = 23.71 6.5
Standard deviation = 4.88 2.54

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 School of Business Department of Economics

Mean = 7+15+12+5+13+18/6= 11.67

Median : 5,7,12,13,15,18
Median= 12+13/2= 12.5
Mode = no mode
Range =max-min = 18- 5 = 13
X x-xbar x-xbar square
7 7-11.67= -4.67 21.80
5 5-11.67=-6.67 44.48
12 12-11.67= 0.33 0.108
13 13-11.67= 1.33 1.76
15 15-11.67= 3.33 11.08
18 18-11.67= 6.33 40.06
Total 118.568
Variance = 118.568 / 5 = 23.71
Standard deviation = 4.87

(table)
Data Set 1 Comparariso Data Set 2
n
Mean 11.67 > 9

Arranged Data 5, 7, 12, 13, 15,18 6, 8, 9, 9, 13

Median 12.5 > 9
Mode No mode 9
Range 13 > 7
Variance 23.8668 > 6.5
Stand. Deviat. 4.885 > 2.5
Data Set 1 has basically higher measures in almost all measures computed. Data Set 1
seems to be more dispersed than Data Set 2 as seen with a greater standard deviation.

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 School of Business Department of Economics

Problem 6

The average of hourly wages of 6 employees is 77.5. One value is missing.

The wages are as follows:
66, 90, 85, 70, 74, and X x=?
. Find the value of X. 77.5 = 66+90+85+70+74+x / 6
77.5 times 6 = 385+x
465=385+x
X= 465-385 = 80

66+90+ 85+70+74+ X
Mean = = 77.5  385 + X = 465  X = 465- 385= 80
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Problem 7

In BSTA 205 class, the grades of a sample of 9 students are:

40, 82, 91, 100, 92, 70, 62, 70 and 23
a- What is the average grade? (Mean)
40+82+ 91+100+ 92+70+62+70+23
Average grade = = 70
9
b- Calculate the mode, median and range.
Mode is the most frequent observation and it is 70
Median is the middle observation after arranging them23,40,62,70,70,91,92,100
Median is 70
Range = Highest observation – Lowest observation = 100 – 23 = 77
c- Calculate the variance and standard deviation.
∑ ( Xi− X́ )2
Variance = = (900 + 144 + 441 + 900 + 484 + 0 + 64 + 0 + 2209)/8 =
n−1
642.75
Standard deviation = √ variance = √ 639 = 25.35
d- Can we consider the standard deviation as the best measure of dispersion? Why?
Yes, because the SD takes into account all the values of the distribution and it is not affected by
outliers.
e- Compare the mean, median and mode of the grades and comment on the shape of their
distribution.
Mean = Mode = Median  grades are normally distributed ( symmetric )

Problem 8

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 School of Business Department of Economics

In a course entitled “experimental psychology” students train white rats to do various tasks based
on performance/reward theory. One event is the hurdles. Times in seconds for seven rats to run
the hurdles were:
5.2, 3.3, 3.3, 3.1, 2.8, 2.3, 1.6
Is the data discrete or continuous?
Data is continuous because the time is measured

Problem 9
If the average of 7 numbers is 9 and the average of 3 of these numbers is 5, what is the average
of the other 4 numbers?
a+b+ c+ d+ e+ f + g
Assume that the numbers are a, b, c, d, e, f, and g  =9
7
 a + b + c + d + e + f + g = 7*9 = 63
a+b+ c
And = 5  a + b + c = 3*5 = 15
3
d +e+ f + g 48
Thus d + e + f + g = 63 – 15 = 48  = = 12
4 4
Problem 10
The average arithmetic mean of a set of 6 numbers is 28, if a certain number Y is removed from
the set; the average of the remaining numbers in the set is 24. What is the value of Y?
Assume that the numbers are as follows a, b, c, d, e and y
a+b+ c+ d+ e+ y
Mean is = 28  a+ b+c +d +e + y = 168
6
168− y
If y is removed then the mean of the remaining 5 numbers is 24  = 24 thus Y = 48
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Problem 11

The time (in seconds) that it took for each of a sample of 4 vehicles to exit a parking lot in
downtown Cincinnati is:
106 51 72 139

1) Calculate the mean, median, and mode. Mean = 106+51+72+139 /4 = 92

X=
∑ X =368 =92
n 4
Median : 51 72 106 139 median = 72+106/2=
89

The median is the middle number when the data are ordered.
51 72 106 139

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 School of Business Department of Economics

72+106 178
= =89
Median = 2 2
No mode.

2) Comment on the skewness.

Since median < mean the distribution is positively skewed (skewed to the right).
89 < 92
3) Calculate the variance and standard deviation for the sample data (sample 1) using the
below table.

X x bar x-x bar square

51 51-92= -41 1681
72 72-92= -20 400
106 106-92= 14 196
139 139-92=47 2209
Total 4,486

Variance = 4,486/ 3 = 1495 .3

X X −X ( X −X )2
51 -41= 51-92 1681
72 -20 400
106 14 196
139 47 2209
Total 0 4486

Variance of sample 1
2 ∑ ( X− X )2 4486 4486
S= = = =1495. 33
n−1 4−1 3

Standard deviation of sample 1

S= √1495 .33=38 .67
4) Suppose the time to exit a parking lot in St. Louis ( 2) has a standard deviation 45.
Compare the dispersion in both parking lot.
Since the standard deviation of sample 1 is less than the standard deviation in sample 2
because 38.67 < 45, the dispersion in sample 1 is less than the dispersion in sample 2.

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School of Business Department of Economics

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