In: Statistics and Probability
A recent market study produced the following data on annual income level by market area:
Annual Income Level |
Area A |
Area B |
TOTAL |
Up to 50K |
1250 |
2350 |
3600 |
50K-80K |
1460 |
1540 |
3000 |
Over 80K |
265 |
385 |
650 |
TOTAL |
2975 |
4275 |
7250 |
1. State the null and alternative hypotheses for a Chi Square test to determine whether annual income level is dependent of market area. (2 Points)
2. State the rejection rule using the critical value approach. Let alpha = 0.05. (2 Points)
3. Calculate the expected frequency for the cell “Over 80K” and “Area B” (2 Points)
4. If the Chi Square statistic is 131.524, what is your conclusion? (2 Points)
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