Suppose you hypothesized that the average salary in the company is $75,000. You then collect a sample of salaries for employees of the company. Using statistical theory, you know that, if the average salary is $75,000, then the probability that your sample average is above $90,000 or below $60,000 is 0.05. If you observe an average salary of $91,000:
A) you make the inductive argument that the probability that your sample average is above $90,000 or below $60,000 is not 0.05. The strength of this argument is 5%.
B) you make the deductive argument that the probability that your sample average is above $90,000 or below $60,000 is not 0.05. The strength of this argument is 95%.
C) you make the inductive argument that the average salary in the company is not $75,000. The strength of this argument is 95%.
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

Given the observed average salary of $91,000, which falls outside the expected range if the true average were $75,000 (with a 5% probability of such an extreme result occurring by chance), you can inductively argue that the true average salary is likely not $75,000. The strength of this argument corresponds to the confidence level, which is 1 - 0.05 = 95%.

Suppose You Hypothesized That the Average Salary in the Company