In: Statistics and Probability
The Bureau of Labor Statistics shows that the average insurance
cost to a company per employee per hour is $1.84 for managers and
$1.99 for professional specialty workers. Suppose these figures
were obtained from 14 managers and 15 professional specialty
workers and that their respective population standard deviations
are $0.38 and $0.51. Assume that such insurance costs are normally
distributed in the population.
a. Calculate a 98% confidence interval to estimate the difference
in the mean hourly company expenditures for insurance for these two
groups. What is the value of the point estimate?
b. Test to determine whether there is a significant difference in
the hourly rates employers pay for insurance between managers and
professional specialty workers. Use a 2% level of significance.