You take a job selling magazine subscriptions from home because the recruitment video says the average earnings per employee are $90,000 a year. You work 60 hours a week for a year and earn $30,000. An Internet search reveals that hundreds of people have had the same experience with this and other work-at-home schemes. How can companies legitimately claim that the average salary is $90,000 if most employees make less than $30,000?
A) The median salary is higher than the mean salary.
B) The mean salary reflects the presence of outliers.
C) The modal salary is higher than the mean salary.
D) The average salary does not consider the highest and lowest salaries.

Question

Quizplus · Accepted Answer

The mean salary can be heavily influenced by outliers, or a few employees who make significantly more than the majority. In this case, it is likely that a small percentage of employees are making much more than $90,000, while the majority are making far less. Therefore, the mean salary is not an accurate measure of what the average employee can expect to earn.

You Take a Job Selling Magazine Subscriptions from Home Because