The Development Office and the Registrar Have Provided You with Anonymous

question 23

Essay

The development office and the registrar have provided you with anonymous matches of starting salaries and GPAs for 108 graduating economics majors. Your sample contains a variety of jobs, from church pastor to stockbroker.
(a)The average starting salary for the 108 students was $38,644.86 with a standard deviation of $7,541.40. Construct a 95% confidence interval for the starting salary of all economics majors at your university/college.
(b)A similar sample for psychology majors indicates a significantly lower starting salary. Given that these students had the same number of years of education, does this indicate discrimination in the job market against psychology majors?
(c)You wonder if it pays (no pun intended)to get good grades by calculating the average salary for economics majors who graduated with a cumulative GPA of B+ or better, and those who had a B or worse. The data is as shown in the accompanying table. $\begin{array} { | c | c | c | c | } \hline \text { Cumulative GPA } & \begin{array} { c } \text { Average Earnings } \\\bar { Y }\end{array} & \begin{array} { c } \text { Standard deviation } \\S _ { Y }\end{array} & n \\\hline \text { B+ or better } & \$ 39,915.25 & \$ 8,330.21 & 59 \\\hline \text { B or worse } & \$ 37,083.33 & \$ 6,174.86 & 49 \\\hline\end{array}$ Conduct a t-test for the hypothesis that the two starting salaries are the same in the population. Given that this data was collected in 1999, do you think that your results will hold for other years, such as 2002?

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Definitions:

Pareto Optimal Allocation

A resource distribution scenario where no individual can be made better off without making at least one individual worse off.

Utility Function

A mathematical representation of how different combinations of goods or services provide levels of satisfaction or utility to an individual.

Initial Endowment

The initial allocation or distribution of resources, goods, or wealth among individuals or entities at the start of an economic experiment or model.

Apples

A type of fruit commonly consumed fresh, cooked, or as juice, recognized for its sweet or tart flavor.