Question

1. What is the typical dispersion of wages and what is the 90/10 percentile ratio? What is the difference between the mean and median wage? Why do we prefer to use one over the other? Be sure to draw the distribution diagrams.

Answer 1

1. wage dispersion is an economic concept whic states that Wage dispersion is the variation in wages encountered in an economy.
2. 90/10 percentile ratio or income inequality ratio is the wage or salary income earned by individuals at the 90th percentile (those earning more than 90 percent of other workers) as compared to the earnings of workers at 10th percentile.
3. the median is the salary where half of the workers earn more,half earn less.On the other side mean wage is he number you get by adding all salaries together, then dividing by the number of them.
4. it is better to use median wage against the mean one for a simple reason  that mean is very sensitive to outliers that is abnormally very low or high prices while median is much less affected by outliers in a graph.