Question

The mean income per year of employees who produce internal and external newsletters and magazines for corporations was reported to be $76300. These editors and designers work on corporate publications but not on marketing materials. As a result of poor economic conditions and oversupply, these corporate communications workers may be experiencing a decrease in salary. A random sample of 40 corporate communications workers revealed that x̄ = $73000. Conduct a hypothesis test to determine whether there is any evidence to suggest that the mean income per year of corporate communications workers has decreased. Assume that the population standard deviation is $6360. Please use the exact value (from R) for all critical values.

Test statistic = -3.2816

P-value = 0.0005160833

a. Calculate the appropriate 99% bound that is consistent with a one-sample z-test.

b. Interpret the bound calculated above.

c. If the employer also found a cheaper medical insurance that reduced the amount of money that the employees have to pay for health insurance by $1000 per year, in practical terms, are the employees really taking home less money than before? Please explain your answer.

d. Explain why parts the test statistic and p-value state the same thing as the calculated bound. That is, what in the first part is consistent with the second part.

Answer 1