A Simple Random Sample of Ten Firms Was Asked How

question 31

Essay

A simple random sample of ten firms was asked how much money (in thousands of dollars) they spent on employee training programs this year and how much they plan to spend on these programs next year. The data are shown below. $$\begin{array} { l r r r r r r r r r r } \text { Firm } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\\text { This year } & 25 & 31 & 12 & 15 & 21 & 36 & 18 & 5 & 9 & 17 \\\text { Next year } & 21 & 30 & 18 & 20 & 22 & 36 & 20 & 10 & 8 & 15\end{array}$$ Assume that the populations of amount spent on employee training programs are normally distributed.
a. Estimate with 95% confidence the mean difference.
b. Briefly explain what the interval estimate in part a. tells you.

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Definitions:

Non-pecuniary Job Benefits

Non-pecuniary job benefits are perks or advantages of employment that do not involve direct monetary payment, such as a flexible working schedule or health insurance.

Employment Discrimination

Unfair treatment of employees or job applicants based on race, gender, age, religion, nationality, disability, or sexual orientation instead of job qualifications or performance.

Tournament Pay

A compensation structure where rewards are based on relative performance, often used in settings where output is hard to measure individually.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production, holding all other factors constant.