Question

A) State the null and alternate hypotheses. Will we use a left-tailed, right railed, or two tailed test? What is the level of significance? B) Identify the sampling distribution to be used: Standard normal or the Students T. Compute the Z or T value of the able test statistic and sketch its location. C) Find the P value for the sample test statistic. D) should we reject or fail to reject the null hypothesis?

How productive are employees? One way to answer this question is to study annual company profits per employee. Let x₁ represent annual profits per employee in computer stores in St. Louis. A random sample of n₁ = 11 computer stores gave a sample mean of x₁ = $25,200 profit per employee with sample standard deviation s₁ = $8,400. Another random sample of n₂ = 9 building supply stores in St. Louis gave a sample mean x₂ = $19,900 per employee with sample standard deviation s₂ = $7,600. Does this indicate that in St. Louis computer stores tend to have higher mean profits per employee? Use α = 0.01.

Answer 1

We will use right railed test

What is the level of significance

the Students T sampling distribution to be used

To Test :-

H0 :-  

H1 :-  

Test Statistic :-


t = 1.4795

Test Criteria :-
Reject null hypothesis if


DF = 17

Result :- Fail to Reject Null Hypothesis

P value = P ( t > 1.4795 ) = 0.07814

Reject null hypothesis if P value < level of significance

P value = 0.07814 > 0.01, hence we fail to reject null hypothesis

Conclusion :- There is insufficient evidence to support the claim that the  St. Louis computer stores tend to have higher mean profits per employee at 1% level of significance.