The Congressional Budget Office reports that 36% of federal civilian employees have a bachelor's degree or higher (The Wall Street Journal). A random sample of 117 employees in the private sector showed that 31 have a bachelor's degree or higher. Does this indicate that the percentage of employees holding bachelor's degrees or higher in the private sector is less than in the federal civilian sector? Use α = 0.05. What are we testing in this problem? single proportion single mean (a) What is the level of significance? State the null and alternate hypotheses. H0: μ = 0.36; H1: μ > 0.36 H0: μ = 0.36; H1: μ ≠ 0.36 H0: p = 0.36; H1: p ≠ 0.36 H0: p = 0.36; H1: p < 0.36 H0: p = 0.36; H1: p > 0.36 H0: μ = 0.36; H1: μ < 0.36 (b) What sampling distribution will you use? What assumptions are you making? The standard normal, since np > 5 and nq > 5. The Student's t, since np > 5 and nq > 5. The standard normal, since np < 5 and nq < 5. The Student's t, since np < 5 and nq < 5. What is the value of the sample test statistic? (Round your answer to two decimal places.) (c) Find (or estimate) the P-value. P-value > 0.250 0.125 < P-value < 0.250 0.050 < P-value < 0.125 0.025 < P-value < 0.050 0.005 < P-value < 0.025 P-value < 0.005 Sketch the sampling distribution and show the area corresponding to the P-value. (d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α? At the α = 0.05 level, we reject the null hypothesis and conclude the data are statistically significant. At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are statistically significant. At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are not statistically significant. At the α = 0.05 level, we reject the null hypothesis and conclude the data are not statistically significant. (e) Interpret your conclusion in the context of the application. There is sufficient evidence at the 0.05 level to conclude that the proportion of bachelor or higher degrees in the private sector is less than in the federal civilian sector.There is insufficient evidence at the 0.05 level to conclude that the proportion of bachelor or higher degrees in the private sector is less than in the federal civilian sector.
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
The Congressional Budget Office reports that 36% of federal civilian employees have a bachelor's degree or higher (The Wall Street Journal). A random sample of 117 employees in the private sector showed that 31 have a bachelor's degree or higher. Does this indicate that the percentage of employees holding bachelor's degrees or higher in the private sector is less than in the federal civilian sector? Use α = 0.05.
What are we testing in this problem?
State the null and alternate hypotheses.
(b) What sampling distribution will you use? What assumptions are you making?
What is the value of the sample test statistic? (Round your answer to two decimal places.)
(c) Find (or estimate) the P-value.
Sketch the sampling distribution and show the area corresponding to the P-value.
(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?
(e) Interpret your conclusion in the context of the application.
There is insufficient evidence at the 0.05 level to conclude that the proportion of bachelor or higher degrees in the private sector is less than in the federal civilian sector.
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