a salary adjustment was given to two retail stores recently merged. Ten employee

Question

a salary adjustment was given to two retail stores recently merged. Ten employees' salaries were recorded before and after the adjustment. The average difference was an increase of $2,250 with a standard deviation of $1,100. Test if the increase is significant at the .10 level? What is the direction of the alternative hypothesis? What is the test statistic that must be used (two independent means z, two independent means t, two dependent means t, two variances/s.d.s F)? What is the value of the calculated test statistic (round to 3 digits)? What is the P-value (round to 4 digits)? True or False: The decision is to reject the null hypothesis? True or False: The decision implies that there is a significant difference in salaries?   

Explanation / Answer

a) Direction of Alternate hypothesis will be > because we want to test whether the increase is significant or not

b) We will use Two dependent means test (T)

c) Test Statistic will be = (2250/1100) = 2.045

d) P value = 1-T.DIST(2.045, 9, TRUE) = 0.0356

e) Reject the null hypothesis

f) True

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