1. The survey conducted last year by my students in Business Studies found out that the average net income for Business graduates is $74,914. One of my current students queried the results and decided to repeat the research by taking a random sample of 112 Business Graduates to determine whether the net income figure is different.

• Establish the hypotheses.
• Determine the appropriate statistical test and sampling distribution.
• Specify type I error or a.
• Suppose the 112 Business Graduates who respond produce a sample mean of %78,695 and the standard deviation of net incomes - $14,530. Can the student reject the null hypothesis?

1. In a report prepared by the Economic Research Department of a major bank the Department manager maintains that the average annual family income on Metropolis is $48,432. What do you conclude about the validity of the report if a random sample of 400 families shows and average income of $48,574 with a standard deviation of 2000?

• Specify population parameter of interest
• Establish hypotheses (the null and alternative hypotheses)
• Show if the alternative hypothesis is one or two tails
• Decide which statistical test is appropriate to for the hypothesis testing
• Provide the formula for the test statistics you select in (c)
• Specify type one error
• Use p-value OR Use critical value method to determine the critical values
• Make statistical decision
• Provide managerial conclusion