Hypothesis Testing

1. Matador-Addis Tyre Share Company claims that its tires have a mean life of 35,000 miles. A
random sample of 16 of these tires is tested if the sample mean in 33,000 miles. Assume that
the population standard deviation is 3000 miles and the lives of tires are approximately
normally distributed. Test the share company’s claim using a 5% level of significance.
2. A Teachers’ union is on strike for higher wages. The union claims that the mean salary for
teachers is at most Birr 8,400 per year. The legislator does not want to reject the union’s
claim, however, unless the evidence is very strong against it. Assume that salaries follow a
normal distribution and the population standard deviation is known to be Birr 3000. A
random sample of 64 teachers is obtained, and the sample mean is Birr, 9,400. Test if the
state legislator accepts the unions’ claim or not at 1% significance level.
3. A survey of college graduates showed that the average yearly cash income for these
graduates in at least Birr 12,000. You are required to test this claim. You randomly select 88
graduates who are marking. The sample average income for these working graduates is
Birr 13,200 with a standard deviation of Birr 2,280. Is there enough evidence from this
sample data to reject the national claim? Use  = 0.10.
4. A fertilizer company claims that the use of its product will result in a yield of at least 35
quintals of wheat per hectare, on average, Application at the fertilizer to a randomly
selected 36 sample hectares resulted in a yield of 34quintals per hectare. Assume the
population standard deviation is 5 quintals and yields per hectare are normally distributed.
Test the company’s claim at 1% level of significance.
5. Is there any difference between the average salary of a business graduates and a engineering
graduates? In an effort to answer that question a researcher takes a random sample of 23
business graduates across a region, resulting in a sample average salary of Birr 20,000 with a
standard deviation of Birr 1,550; and 35 engineering graduates with and average salary of
Birr 18,500 with a standard deviation of Birr 1,420. Use =0.01 to test this question
6. In a wage discrimination case involving male and female employees, it is assumed that male
employees have a mean salary less than or equal to that of female employees. To justify
this, independent random samples of male and female employees were taken and the
following result obtained.
Male Employees Female Employees

n1 = 100 n2 = 100

X 1 = Birr 20,600 X 2 = Birr 19,700

S1 = 3,000 S2 = Birr 2,500

Test the hypothesis with  = 0.025. Does wage discrimination appear to exist in this case?

7. A marketing research firm wishes to know if the mean number of his of TV viewing per
week is the same for teenage boys and teenage girls using a 5% level of significance. The
unknown population variances are assumed to be equal. The following data were obtained
is an attempt to test the equality of 1 and 2.
 Teenage Boys Teenage Girls

n1 = 20 n2 = 12

X 1 = 24.5 hrs X 2 = 28.7 hrs

S21 = 64 hrs S22 = 71 hrs

Chi-Square Distribution
8. A company planning a TV advertising campaign wants to determine which TV shows its
target audience watches and thereby to know whether the choice of TV program an
individual watches is independent of the individuals income. The table supporting this is
shown below. Use a 5% level of significance and the null hypothesis.

Income Type of Show

Basketball Movie News Total

Low 143 70 37 250

Medium 90 67 43 200

High 17 13 20 50

Total 250 150 100 500

9. A human resource manager at EAGLE Inc. was interested in knowing whether the
voluntary absence behavior of the firm’s employees was independent of marital status. The
employee files contained data on marital status and on voluntary absenteeism behavior for a
sample of 500 employees is shown below.

Marital Status

Absence behavior Married Divorced Widowed Single Total

Often absent 36 16 14 34 100

Seldom absent 64 34 20 82 200

Never absent 50 50 16 84 200

Total 150 100 50 200 500

Test the hypothesis that absence behavior is independent of marital status at a significance level
of 1%.

10. The personnel administrator of XYZ Company provided the following data as an example
of selection among 40 male and 40 female applicants for 12 open positions.

Applicant Status

Selected Not selected Total

Male 7 33 40

Female 5 35 40

Total 12 68 80

11. The X2 test of independence was suggested as a way of determining if the decision to hire 7
malls and females should be interpreted as having a selection bias in favor of males.
Conduct the test of independence using = 0.10. What is your conclusion?
A. Using the same test, would the decision to hire 8 malls and 4 females suggest concern for
a selection bias?
B. How many males could be hired for the 12 open positions before the procedure would
concern for a selection bias?