Assignment: Hypothesis Tests
Competency
Given a real-life application, develop a hypothesis test for a population parameter and its interpretation.
Instructions
Scenario
A major client of your company is interested in the salary distributions of jobs in the state of Minnesota that range from $30,000 to $200,000 per year. As a Business Analyst, your boss asks you to research and analyze the salary distributions. You are given a spreadsheet that contains the following information:
• A listing of the jobs by title
• The salary (in dollars) for each job
In prior engagements, you have already explained to your client about the basic statistics and discussed the importance of constructing confidence intervals for the population mean. Your client says that he remembers a little bit about hypothesis testing, but he is a little fuzzy. He asks you to give him the full explanation of all steps in a hypothesis testing and wants your conclusion about a claim that the average salary for all jobs in the state of Minnesota is less than $75,000.
Background information on the Data
The data set in the spreadsheet consists of 364 records that you will be analyzing from the Bureau of Labor Statistics. The data set contains a listing of several jobs titles with yearly salaries ranging from approximately $30,000 to $200,000 for the state of Minnesota.
Worksheet
Describe the 8 steps in the process for hypothesis testing. Explain the decision criteria for rejecting the null hypothesis for both the p-value method and the critical value method.
The remaining problems refer to the following scenario:
A claim is made that the average salary for all jobs in Minnesota is less than $75,000. You are going to test the claim using α=0.05 and assume that your data is normally distributed and the population standard deviation (σ) is not known.
Write the null and alternative hypotheses symbolically and identify which hypothesis is the claim. Then identify if the test is left-tailed, right-tailed, or two-tailed and explain why.
Identify and explain which test statistic you will use for your hypothesis test: z or t? Find the value of the test statistic.
What is the critical value? Describe the rejection region.
Using the critical value approach, should you reject the null hypothesis or not reject the null hypothesis? Explain. After making your decision, restate it in non-technical terms and make a conclusion about the original claim.
Calculate the p-value for this hypothesis test, and state the hypothesis conclusion based on the p-value. Does this match your results from the critical value method?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Spreadsheet.rar