A Researcher Would Like to Determine If a Higher Proportion

question 27

Essay

A researcher would like to determine if a higher proportion of students than faculty support caps on textbook prices. The researcher gathers a random sample of 500 students and 500 faculty members and asks whether or not they support textbook price caps. Of the 500 students, 378 say they support capping textbook prices and of the 500 faculty members 256 say they support capping prices.
a.What are the hypotheses the researcher should use?
b.Are the assumptions met for a large sample test?
c.What is the P-value for the hypothesis test?
d.What conclusion can be drawn?

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Definitions:

Induced Consumption

The portion of consumption that changes as a result of changes in income, with higher incomes leading to increased consumption.

Autonomous Consumption

The amount of consumption that occurs regardless of current income levels, reflecting basic spending needed to survive.

Saving

The portion of income not spent on consumption but kept aside for future use, which may be invested to generate wealth.

Disposable Income

The amount households can devote to saving and spending once income taxes have been factored in.