Question

Using a 5% level of significance, test whether the mean weekly earnings is more than 700. Assume that a sample of 36 has a mean of 750 and a population standard deviation () of 100

Answer 1

Solution:

This a right (One) tailed test.

The null and alternative hypothesis is,  

Ho: 700

Ha: 700

The test statistics,

Z =( - )/ (/n)

= ( 750 - 700 ) / ( 100 / 36 )

= 3

P-value = P(Z > z )

= 1 - P(Z < 3 )

= 0.0013

The p-value is p = 0.0013, and since p = 0.0013 < 0.05 , it is concluded that the null hypothesis is rejected.

There is enough evidence to claim that the  mean weekly earnings is more than 700.