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American software

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American software [#permalink]  02 Jul 2011, 04:15
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Hey everyone.

Please let me know how you separate between C and E.

i understand why C is right, but still dont understand why E is wrong.

Lets say i had in 1980 three companies - that all had 50 workers.
and in 2000 - we have one company with 2 workers, one company with 5 workers and one company with 1,000,000 workers. the median will be lower but the total number of workers will be higher in 2000 than in 1980.

Am i missing something?

thanks.
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Last edited by 144144 on 02 Jul 2011, 09:13, edited 1 time in total.
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Re: American software [#permalink]  02 Jul 2011, 05:13
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The argument says the 'typical' software firm employs fewer people now than in 1980. That conclusion is based on a study which compares the number of employees in 1980 and now at the *same* firms. The study thus ignores any firms that came into existence after 1980. Those newer firms might be today's 'typical' software firms, so you can't just ignore them, which is why C is correct.

E is not correct; if you want to work out what is 'typical', you normally want to look at the median and not the average. The average takes into account wildly extreme values (that is, values which are *not* 'typical'), and the median does not. For example, if some entrepreneur making \$10 billion per year were to buy a house in an otherwise low-income neighbourhood, the average annual income in that neighbourhood would be enormous, because that \$10 billion would make a significant contribution to the sum of the incomes in the neighbourhood. The average would not represent the 'typical' income level for that neighbourhood. The median would, however, represent in some way the typical income, since (being a bit imprecise) half of people will earn more than the median, and half will earn less. The presence of one extreme income in the neighbourhood barely affects the median at all. So for the argument in question, you genuinely do want to look at the median and not the average precisely because you do not want some extreme values to distort your statistics.
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Re: American software [#permalink]  02 Jul 2011, 05:19
Very nice explanation. I didnt put enough attention to the word "typical"

Thanks +1.
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Re: American software [#permalink]  02 Jul 2011, 08:09
+1 for C

Crick
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Re: American software [#permalink]  02 Jul 2011, 08:42
hmm... im sorry im nagging again about this one... i understand why C is right, but still dont understand why E is wrong.

Lets say i had in 1980 three companies - that all had 50 workers.
and in 2000 - we have one company with 2 workers, one company with 5 workers and one company with 1,000,000 workers. the median will be lower but the total number of workers will be higher in 2000 than in 1980.

Am i missing something?

thanks.
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Re: American software [#permalink]  02 Jul 2011, 09:09
= C

Whats the source ....
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Re: American software [#permalink]  02 Jul 2011, 15:31
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144144 wrote:
hmm... im sorry im nagging again about this one... i understand why C is right, but still dont understand why E is wrong.

Lets say i had in 1980 three companies - that all had 50 workers.
and in 2000 - we have one company with 2 workers, one company with 5 workers and one company with 1,000,000 workers. the median will be lower but the total number of workers will be higher in 2000 than in 1980.

Am i missing something?

I think you're trying to answer a different question from the one that's being asked.

The question is not asking whether the total number of workers increased. If it were, then yes, the mean would be a better measurement than the median. The question asks instead about the number of workers at *one* 'typical' software firm. The median is more likely to tell you what is 'typical' than is the mean, because the median is not affected by crazy extreme values.
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Re: American software [#permalink]  02 Jul 2011, 16:10
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In addition to the qualified reasoning above:
"E" diverts the context from "firm" to "industry".
Firm is just one company. Industry is the entire Software industry.

Conclusion:
Number of people employed by a firm decreased.

E's reasoning:
Median is not a good indicator for the number of employees in an industry.

Author: Ok true!!!
But, Median may be a good indicator for deducing the number of employees in a software firm.

This becomes a fact that has little to no effect on the conclusion.
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Re: American software [#permalink]  02 Jul 2011, 19:35
damn. I keep missing these small things. Thanks guys. +1 +1
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Re: American software   [#permalink] 02 Jul 2011, 19:35
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