Hypothesis Testing for Mean Gross Annual Income of Certified Tack Welders

Decision Rule for Hypothesis Testing

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Question

The mean gross annual income of certified tack welders are normally distributed with the mean of $20,000 and a standard deviation of $2,000. The ship building association wishes to find out whether their tack welders earn more or less than $20,000 annually. The alternate hypothesis is that the mean is not $20,000. The

0.10 level of significance is to be used. What is the decision rule?

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Explanations

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A. B. C. D. E.

E

Since it is at the 10% significance level we must use z=+/-1.645. The null hypothesis Ho will not be rejected if the z-value falls between the critical value. We reject

Ho if it falls beyond the critical level.