Question

3. (19 pts) Refer to Pagano, Chapter 17, Problem 18 (same in 10^th, 9^th, and 8^th editions; 6^th and 7^th editions: Chapter 18, Problem 18). Here is the q uestion: Because of rampant inflation, the government is considering imposing wage and price controls. A government economist, intere sted in determining whether there is a relationship between occupation and attitude toward wage and price controls, collects the following data. The data show for each occupation the number of individuals in the sample who were for or against the con tr ols. Answer the following questions:

Observed frequencies:	For	Against
Labor	90	60
Business	100	150
Professions	110	90

A. (aa. State the null hypothesis.

b. b. State the alternative hypothesis.

C c. By hand, compute the value of the chi-square statistic. Show all of your work!

D. (d d. What is the critical value of the chi-squared statistic (alpha = .01)? Be sure to include the df in your answer.

E.e. e. What is your decision: reject or retain the null hypothesis? Support your answer via the decision rule.

F. f f. In plain English, interpret what the results mean.

Answer 1