Question

1. A recent report by the American Medical Association stated the average annual salary of psychiatrists is $189,121 with a population standard deviation of $26,975. A group of hospital administrators randomly sampled 64 psychiatrists and found an average annual salary of $198,630. The group claims that the average annual salary is actually higher than what the American Medical Association reported. What is the P-value for this one-sided test?

   		0.0024
   		0.0035
   		0.1328
   		0.0237

Answer 1

Solution :

This is the two tailed test .

The null and alternative hypothesis is ,

H0 : = $ 189,121

Ha : > $ 189,121

Test statistic = z

= ( - ) / / n

= (198630 - 189121) / 26975 / 64

Test statistic = 2.82

P(z > 2.82) = 1 - P(z < 2.82) = 1 - 0.9976

P-value = 0.0024