You are applying for a job at two companies. Company A offers starting salaries

Question

You are applying for a job at two companies. Company A offers starting salaries with mu = exist27,000 and sigma = exist1,000. Company B offers starting salaries with mu = exist27,000 and sigma = exist3,000. From which company are you more likely to get an offer exist29,000 or more? Choose the correct answer below. A. Company A because data values that lie more than two standard deviations from the mean are considered unusual. B. No difference, because data values that lie more than three standard deviations from the mean are considered very unusual. C. Company B, because data values that lie within one standard deviation from the mean are considered very usual.

Explanation / Answer

We calculate probabilities of getting offer more than 29000 for both companies separately.

For company A

p(x>= 29000) = p(z> 29000 - 27000 /1000)

= p(z>=2)

= 1 - p(z<2 )

= 1-0.97725

= 0.02275

For company B

p(x>=29000) = p(z>= 29000 - 27000 / 3000)

= p(z>= 0.667)

= 1 - p(z<0.667)

= 1 - 0.747

= 0.253

Observing both probabilites, company B is a choice .

Also by observing companies B's standard deviation is higher than A so it is more likely to get offer from B.

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