The Bureau of Labor Statistics, U.S. Office of Personnel Management, indicated that the average hourly compensation (salary plus benefits) for federal workers (not including military or postal service employees) was $44.82. The rates for private industry and state and local government workers are believed to be considerably less than that. The file titled Paychecks contains a random sample of the hourly amounts paid to state and local government workers.
a. Generate the margin of error for estimating the average hourly amounts paid to state and local government workers with a 98% confidence level.
b. Determine the sample size required to produce a margin of error equal to 1.40 with a confidence level of 98%. Assume the population standard deviation equals 6.22.
c. Does it appear that state and local government workers have a smaller average hourly compensation than federal workers? Support your opinion.