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mart [117]
4 years ago
9

It is believed that the average starting salary for a 21-25 year old college grad exceeds $52,000 per year. Hence, it is desired

to test H0: µ ≤ 52,000 versus H1 : µ > 52,000. Assume σ = $5,745 and a SRS of size 65 is taken. We reject H0 when X > 53,460. The significance level α is:

Mathematics
1 answer:
gregori [183]4 years ago
5 0

Answer:

The significance level α is 0.02.

Step-by-step explanation:

A hypothesis test for single mean can be performed to determine whether the average starting salary for a 21-25 year old college grad exceeds $52,000 per year.

The hypothesis is defined as follows:

<em>H₀</em>: The average starting salary for a 21-25 year old college grad does not exceeds $52,000 per year, i.e. <em>µ</em> ≤ 52,000.

<em>Hₐ</em>: The average starting salary for a 21-25 year old college grad exceeds $52,000 per year, i.e. <em>µ</em> > 52,000.

The information provided is:

<em>σ</em> = $5,745

<em>n</em> = 65

Also, if \bar X>\$53,460 then the null hypothesis will be rejected.

Here, we need to compute the value of significance level <em>α</em>, the type I error probability.

A type I error occurs when we reject a true null hypothesis (H<em>₀</em>).

That is:

<em>α</em> = P (type I error)

<em>α</em> = P (Rejecting H<em>₀</em>| H<em>₀</em> is true)

   =P(\bar X>53460|\mu \leq 52000)

   =P[\frac{\bar X-\mu_{0}}{\sigma/\sqrt{n}}>\frac{53460-52000}{5745/\sqrt{65}}]

   =P(Z>2.05)\\=1-P(Z

*Use a <em>z</em>-table for the probability.

Thus, the significance level α is 0.02.

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