Question

According to the US Bureau of Labor statistics, the average weekly earning of a production worker in 1997 were $424.5. Suppose a labor researcher wants to test to determine whether this figure is still accurate today .The researcher randomly selected 54 production workers from across the United States and obtained a representative earning statement for one week from each. The resulting sample average is $432.69. Assuming population Standard deviation is 33.90. and a 5% level of significance, To determine whether the mean weekly earnings of the production worker have changed.

Required:
To determine whether the mean weekly earnings of the production worker have changed, what would be the value of test statistics?

Answer 1

test statistic is 1.775

Explanation:

Bar x = 432.69

Standard deviation sd = 33.90

N = 54 production workers

Null hypothesis:

H0: μ = 424.5

Alternate hypothesis

H1: μ not equal to 424.5

Test statistic

= 432.69-424.5/sd/√n

= 8.19/33.9/√54

= 8.19/33.9/7.348

8.19/4.6135

= 1.7752

This is the value of our test statistic

When we test this with level of significance 0.05

Critical value z = 1.96

So we conclude that we do not have enough evidence to reject null hypothesis so we accept null and say mean weekly earnings have not changed