SOLUTION: The University of Cincinnati claims that their students on the average earn more than $40,000 when they graduate. A sample of 16 students reveals a mean of $30,000 and a sample sta

Question 1171765: The University of Cincinnati claims that their students on the average earn more than $40,000 when they graduate. A sample of 16 students reveals a mean of $30,000 and a sample standard deviation of $10,000. The population is normal. Given a level of Type I Error, α = 5%, test the claim. This may be a t-distribution problem. So be careful
a. State the null and alternative hypothesis.
b. State the significance level.
c. Compute the test statistic.
d. The theoretical statistic.
e. Test the claim.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Ho:earn >=40 K
Ha: earn < 40 K
alpha =0.05 p{reject Ho|Ho true}
test stat is a t (0.95,df=15), one way test
critical value t < -1.753
calculation t=(x bar-40000)/10000/sqrt(16)
=-10000*4/10000
=-4
reject Ho and conclude they earn fewer than 40K
p-value < 0.0006
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