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Chapter 3: Q2 (page 91)

USA Today published a list consisting of the state tax on each gallon of gas. If we add the 50 state tax amounts and then divide by 50, we get 27.3 cents. Is the value of 27.3 cents the mean amount of state sales tax paid by all U.S. drivers? Why or why not?

Short Answer

Expert verified

No, because the gas consumption differs in each state.

Step by step solution

01

Given information

27.3 cents is obtained by adding the state tax amounts (on each gallon of gas) for 50 states and dividing them by 50.

02

Mean amount interpretation

The value of 27.3 cents is not the mean amount of sales tax paid by all U.S.drivers. The value would have been the mean value for all U.S.drivers if the number of drivers in each state was the same.

The weightage of consumption is different in each state of the U.S., and hence, this value is not a correct mean amount of state sales tax for all U.S drivers.

Instead, the weighted mean must be used to obtain the appropriate value for the mean amount of state sales tax paid by all U.S drivers.

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