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Economist: Although average hourly wages vary considerably between

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Economist: Although average hourly wages vary considerably between  [#permalink]

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Economist: Although average hourly wages vary considerably between different regions of this country, in each region, the average hourly wage for full-time jobs increased last year. Paradoxically, however, in the country as a whole, the average hourly wage for full-time jobs decreased last year.

Which one of the following, if true of the economist's country, most helps to resolve the apparent paradox in the economist's statements?

(A)  In the country as a whole, the average hourly wage for full-time jobs has decreased slightly for each of the last three years. 


(B)  Last year, to reduce costs, employers moved many full-time jobs from regions with relatively high hourly wages to regions where those jobs typically pay much less. 


(C)  The year before last, the unemployment rate reached a ten-year low; last year, however, the unemployment rate increased slightly. 


(D)  Last year, the rate at which the average hourly wage for full-time jobs increased varied considerably between different regions of
the country. 


(E)  Last year, hourly wages for most full-time jobs in the manufacturing sector declined while those for most full-time jobs in the service sector increased. 


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Re: Economist: Although average hourly wages vary considerably between  [#permalink]

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New post 15 Aug 2018, 10:05
B is correct because only when there is a high wage earners modified to low wage earners the gap can be covered.
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Re: Economist: Although average hourly wages vary considerably between  [#permalink]

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New post 15 Aug 2018, 10:10
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People moving from high earning to low earning region

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Economist: Although average hourly wages vary considerably between  [#permalink]

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New post 15 Aug 2018, 10:21
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AshutoshB wrote:
Economist: Although average hourly wages vary considerably between different regions of this country, in each region, the average hourly wage for full-time jobs increased last year. Paradoxically, however, in the country as a whole, the average hourly wage for full-time jobs decreased last year.

Which one of the following, if true of the economist's country, most helps to resolve the apparent paradox in the economist's statements?

(A)  In the country as a whole, the average hourly wage for full-time jobs has decreased slightly for each of the last three years. 


(B)  Last year, to reduce costs, employers moved many full-time jobs from regions with relatively high hourly wages to regions where those jobs typically pay much less. 


(C)  The year before last, the unemployment rate reached a ten-year low; last year, however, the unemployment rate increased slightly. 


(D)  Last year, the rate at which the average hourly wage for full-time jobs increased varied considerably between different regions of
the country. 


(E)  Last year, hourly wages for most full-time jobs in the manufacturing sector declined while those for most full-time jobs in the service sector increased. 


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GAP: average wage for each of the region in the countries increased
Vs.
average of the country decreased
Why??

To understand the same, lets understand what average is
average = (Weight1*Quantity1 + Weight 2* Quantity2)/ (Weight1+Weight2)

in this context, average for country = (high paying no * high paying wage +low paying no *low paying wage)/(high paying no + low paying no)
no* means number

To put in numbers context to make it simpler, lets say high paying no =50, high paying wage =50, low paying no=50, low paying wage =20
everywhere there is 10% increase in wage, so high paying wage becomes =55 and low paying wage becomes=22
so new average. = (50*55+50*22)/100= 38.5 while old average was = (50*50+50*20)/100= 35 ....... which means average increased

So [question to ask] how the average decreased then..... to prethink.....in weighted average only other choice left with us is the weights which is number of high paying and no of low paying jobs
For this now take the numbers from high paying to low paying and see how average becomes
Lets suppose 30 people left high paying jobs and went to low paying jobs
new average = (20*55 +80*22)/100 = 28.6

Yay...

We got the paradox.... it was all about weighted average concept..... numbers need to shift from high to low.....which is option B....

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Economist: Although average hourly wages vary considerably between &nbs [#permalink] 15 Aug 2018, 10:21
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