The Bureau of Labor Statistics reported that the average yearly income of dentists in the year 2012 was $110,000 . A sample of 81 dentists, which was taken in 2013, showed an average yearly income of $120,000 . Assume the standard deviation of the population of dentists's incomes in 2012 is $36,000
a. We want to test and determine if there has been a significant increase in the average yearly income of dentists. Provide the null and the alternative hypotheses.
b. Compute the test statistic.
c. Determine the p-value; and at a 5% level of significance, test the hypotheses.
a. H0: ? ? $110,000
Ha: ? > $110,000
b. z = 2.5
c. p-value = .0062
Since the p-value = .0062 < .05, reject H0 . Therefore, it can be concluded that there has been a significant increase.
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