Question

The mean salary of federal government employees on the General Schedule is $59,593. The average salary of 30 state employees who do similar work is $58,800 with \sigma σ σ = $1500. At the 0.01 level of significance, can it be concluded that state employees earn on average less than federal employees? What is the critical value? Round your answer to the nearest hundredths.

Answer 1

H₀ : µ = 59593

H₁ : µ < 59593

This is a left-tailed test.

critical value = -Z_0.01 = -2.33

Test statistic   

                    

                     = -2.90

Since test statistic is less than critical value, we should reject the null hypothesis.

Yes, it can be concluded that state employees earn on average less than federal employees