Question

The census figures show that the average income for a family in a rural region is approximately $34,860 per year. A random sample has a mean income of $33,566 per year, with a standard deviation of $1,245. At a sig. level of .0.01 is there enough evidence to reject the claim? Explain.

Answer 1

Try a one-sample z-test or t-test, depending on the size of your sample. Check the appropriate table at 0.01 level of significance for a two-tailed test. Once you calculate the test statistic, compare to the critical or cutoff value(s) from the table to reject or fail to reject the null hypothesis. You can then draw your conclusions.