Question

A developer is considering two alternative sites for a regional shopping center. Since household income in the community is one important consideration in such site selection, the developer wishes to test the null hypothesis that there is no difference between the mean household income amounts in the two communities. Consistent with this hypothesis, it is assumed that the standard deviation of household income is also the same in the two communities. For a sample of 29 households in the first community, the average annual income is $44,500 with the sample standard deviation $1,700. For a sample of 40 households in the second community, average annual income is $43,200 and standard deviation is $2,250. Test the null hypothesis at the 5 percent level of significance.

Answer 1