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In: Statistics and Probability

Assume we know that the population standard deviation of income in the United States (σ) is...

Assume we know that the population standard deviation of income in the United States (σ) is $12,000. A labor economist wishes to test the hypothesis that average income for the United States exceeds $64,000. A random sample of 900 individuals is taken and the sample mean is found to be $65,000. Test the hypothesis at the 0.05 level of significance. What is the p-value of the test statistic?

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Expert Solution

Null hypothesis          


          
Alternative hypothesis   

       
          
We have given,          
Population mean for given example =$64000  
Sample mean=$65000  
Population standard deviation =$12000  
Sample size for given example =   900  
Level of significance =0.05  
Z test statistic formula


=2.5  

P value = P[Z>2.5]

  

=1-0.9938......................by using Z table

= 0.0062

  

orchestra answered 1 year ago
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