Question

The average starting salary of students who graduated from colleges of Business in 2009 was $48,400. A sample of 100 graduates of 2010 showed an average starting salary of $50,000. Assume the standard deviation of the population is known to be $8000. We want to determine whether or not there has been a significant increase in the starting salaries.

Step 1. Statement of the hypothesis     (1.5 marks)

Step 2. Standardised test statistic formula          (1 mark)

Step 3. State the level of significance    (1 mark)

Step 4. Decision Rule (Draw a bell to show rejection zone)         

Step 5. Calculation of the statistic          

Step 6. Conclusion         (1.5 marks)

Answer 1

given data are:-

hypothesis:-

[ claim ]

Standardised test statistic formula:-

the level of significance  = 0.05

Decision Rule :-

reject the null hypothesis , if ,

[ z critical value for alpha=0.05, right tailoed test =1.645 ]

the diagram be:-

Calculation of the statistic :-

Conclusion :-

we reject the null hypothesis. We conclude that there is enough evidence that there has been a significant increase in the starting salaries.

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