The mean annual income of certified welders is normally distributed with a mean
ID: 2909240 • Letter: T
Question
The mean annual income of certified welders is normally distributed with a mean of $50,000 and a population standard deviation of $2,000. The ship building association wishes to find out whether their welders earn more or less than $50,000 annually. The alternate hypothesis is that the mean is not $50,000. If the level of significance is 0.10, what is the decision rule?
Do not reject the null hypothesis if computed z lies between -1.645 and +1.645; otherwise, reject it.
Do not reject the null hypothesis if computed z is greater than 1.645; otherwise, reject it.
Do not reject the null hypothesis if computed z lies between -1.960 and +1.960; otherwise, reject it.
Reject the null hypothesis if computed z is below -1.960; otherwise, reject it.
Do not reject the null hypothesis if computed z lies between -1.645 and +1.645; otherwise, reject it.
Do not reject the null hypothesis if computed z is greater than 1.645; otherwise, reject it.
Do not reject the null hypothesis if computed z lies between -1.960 and +1.960; otherwise, reject it.
Reject the null hypothesis if computed z is below -1.960; otherwise, reject it.
Explanation / Answer
The ship building association wishes to find out whether their welders earn more or less than $50,000 annually.
Hence, this is a two tailed test.
As alpha = 0.10, two tailed, then alpha/2 = 0.05, hence,
Decision rule: Reject Ho when |z| > 1.645
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