A University Wants to Know If the Average Salary of Its

question 27

Essay

A university wants to know if the average salary of its graduates has increased since 2015. The average salary of graduates prior to 2015 was $48,000. Since 2015, the university surveyed 256 graduates and found an average salary of $48,750. Assume that the standard deviation of all graduates' salaries is $7,000.
A) Specify the null and alternative hypotheses to determine whether the average salary of graduates has increased.
B) Calculate the value of the test statistic and the p-value at a 5% significance level.
C) At the 5% significance level, can you conclude that salaries have increased? Explain.

• A) Specify the null and alternative hypotheses to determine whether the average salary of graduates has increased.
• B) Calculate the value of the test statistic and the p-value at a 5% significance level.
• C) At the 5% significance level, can you conclude that salaries have increased? Explain.

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Definitions:

Fixed Percentage

A specified, constant proportion or rate that does not change with variation in base quantities, often used in financial contexts like interests or commissions.

Deferred Profit-Sharing Plans

A type of profit-sharing plan where contributions are deferred and placed in a trust for the employee until a set time, often retirement.

Quasi Pension Plans

Programs that mimic traditional pension plans but typically offer more flexibility and are often funded by the employees, sometimes with employer contributions.

Monetary Reward

Financial compensation given to employees as a form of acknowledgment for their work performance or achievement.