Question

# The Department of Labor would like to test the hypothesis that the average hourly wage for...

The Department of Labor would like to test the hypothesis that the average hourly wage for recent college graduates is less than \$20. A random sample of 24 recent college graduates averaged \$19.30 per hour with a standard deviation of \$3.20 per hour. The Department of Labor would like to set ? = 0.10. Use the critical value approach to test this hypothesis. please either type this answer or be very careful to make your handwriting legible

Given that, sample size (n)= 24

sample mean =\$19.30 per hour

sample standard deviation ( s ) = \$3.20 per hour

Significance level = 0.10

Null and alternative hypotheses are,  Test statistic is, Test statistic is t = -1.072

t-critical value at with degrees of freedom= n-1 = 24-1 =23 is, t* = -1.319

Decision rule: since it is left-tailed test,

Reject H0, if test statistic is less than critical value = -1.319

Here, test statistic = -1.072 > t* = -1.319

implies that we fail to reject the null hypothesis (H0)

Conclusion: There is not sufficient evidence to conclude that the average hourly wage for recent college graduates is less than \$20.

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