Which of the following measures of central tendency is the best representation of the data...
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Which of the following measures of central tendency is the best representation of the data in the following situation?
In a town of 100 people, the mean income is $25,000 per month. Bill Gates relocates to live in the town and the mean income rises significantly.
Select any one of the following
Show answer & explanation
The median is resistant to extreme outliers and skewed data, making it the most representative measure of central tendency for wealth/income distribution.
Step-by-step Derivation:
Step 1: The mean is sensitive to extreme values; a single billionaire dramatically inflates the arithmetic mean.
Step 2: The median represents the middle value of the ordered data and remains virtually unchanged by extreme outliers.
Step 3: Therefore, the median is the best measure of central tendency in this situation.