A recent market study produced the following data on annual income level by market area:

Annual Income Level Area A Area B TOTAL

Up to 50K 1250 2350 3600

50K-80K 1460 1540 3000

Over 80K 265 385 650

TOTAL 2975 4275 7250

1.State the null and alternative hypotheses for a Chi Square test to determine whether annual income level is dependent of market area. (2 Points)

2.State the rejection rule using the critical value approach. Let alpha = 0.05. (2 Points)

3.Calculate the expected frequency for the cell "Over 80K" and "Area B" (2 Points)

4.If the Chi Square statistic is 131.524, what is your conclusion? (2 Points)