Question

1. The Wall Street Journal reported that bachelor’s degree recipients with majors in business average starting salaries of $53,900 in 2012 (The Wall Street Journal, March 17, 2014). The results for a sample of 100 business majors receiving a bachelor’s degree in 2013 showed a mean starting salary of $55,144 with a sample standard deviation of $5,200. Conduct a hypothesis test to determine whether the mean starting salary for business majors in 2013 is greater than the mean starting salary in 2012. Use a = .01 as the level of significance.

Answer 1

x bar = 55144, s = 5200, n = 100  
Null and Alternative hypothesis:  
Ho : µ = 53900
H1 : µ >    53900
Test statistic:  
t = (x bar- µ)/(s/√n) = (55144 - 53900)/(5200/√100) =    2.3923
df = n-1 =    99
Critical value :  
Right tailed critical value, t-crit = ABS(T.INV(0.01, 99)) =    2.365
Reject Ho if t > 2.365  
p-value :  
Right tailed p-value = T.DIST.RT(2.3923, 99) =    0.0093
Decision:  
p-value < α, Reject the null hypothesis  
Conclusion:  
There is enough evidence to conclude that the mean starting salary for business majors in 2013 is greater than the mean starting salary in 2012.