Hypothesis Test for a Mean (one-tail)
Related Topics
Mark Yourself Question
- Grab a piece of paper and try this problem yourself.
- When you're done, check the "I have answered this question" box below.
- View the solution and report whether you got it right or wrong.
In 2013, the business department reported that the average monthly salary for co-op students is $2,960. Kenya randomly sampled 25 co-op students in the business department. The sample mean is $3,325 with a standard deviation of $940. Assume the population is normally distributed. At the significance level 𝜶 = 𝟎.𝟎𝟓, is there evidence that the monthly salary is higher now?
(a) Is this a z-test or a t-test?
(b) State the hypotheses:
(c) What is the critical value?
(d) Find the test statistic:
(e) Find the p-value.
(f) Select the correct conclusion:
i. We reject 𝐻o; there is evidence that the monthly salary is higher now.
ii. We reject 𝐻o; there is no evidence that the monthly salary is higher now.
iii. We fail to reject 𝐻o; there is evidence that the monthly salary is higher now.
iv. We fail to reject 𝐻o; there is no evidence that the monthly salary is higher now.
(g) What would be the conclusion if 𝜶 = 𝟎. 𝟎𝟏?
i. We reject 𝐻o; there is no evidence that the monthly salary is higher now.
ii. We fail to reject 𝐻o; there is evidence that the monthly salary is higher now.
iii. We fail to reject 𝐻a; there is no evidence that the monthly salary is the same.
iv. We fail to reject 𝐻o; there is no evidence that the monthly salary is higher now.
(h) What does that say about the strength of the evidence?