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Hypothesis Testing of Average Salary for Executives

The executive committee has learned that the average salary for executives in the industry is $140,000, and the committee is concerned that they are not being paid enough. Using the random sample, test the committee's idea that the mean of executive salaries is at least equal to that of the industry standard. You may assume a=.05 and the population is symmetrical and mounded.

Please see the attached document for the full question.

Complete the following:
a. State the:
b. What is the critical value of the test statistic?
c. State the decision rule.
d. Sketch the sampling distribution showing the regions of acceptance.
e. Show computation and then state the statistical decision
f. Regardless of what has been previously concluded if the value of the test statistic has been t= +2.43 what would your statistical decision have been?
g. How do you know which tail to perform the test?


Solution Summary

This response performs a hypothesis test on the average salary for an executive committee based on the concern that the committee's salary is not equal to the industry standard.