A temp agency feels that one of its recruiters has unorthodox methods and claims

Question

A temp agency feels that one of its recruiters has unorthodox methods and claims that the wages the recruiter secures for its temps differs from the agency's average wage of $12 per hour. The agency takes a random sample of 49 recent contracts the recruiter secured and finds an average wage of $11.25 per hour and a standard deviation of $2.25 per hour. Does the evidence support the agency's claim at the 5% significance level?

C)Yes, since the value of the test statistic is less than the critical value, the claim is supported.

D)No, since the value of the test statistic is greater than the critical value, the claim is not supported.

Explanation / Answer

x' = 11.25 s = 2.25 n = 49

a = x' - zs / n = 11.25 - 1.96 * 2.25 / 7 = 10.62

b = x' + zs / n = 11.25 + 1.96 * 2.25 / 7 = 11.88

Note that the claimed value is outside the interval.

The correct answer is D) No, since the value of the test statistic is greater than the critical value, the claim is not supported

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