The mean annual income of certified welders is normally distributed with a mean of $50,000 and a population standard deviation of $2,000. The ship building association wishes to find out whether their welders earn more or less than $50,000 annually. The alternate hypothesis is that the mean is not $50,000. If the level of significance is 0.10,what is the decision rule?
A)Do not reject the null hypothesis if computed z lies between −1.645 and +1.645; otherwise,reject it.
B)Do not reject the null hypothesis if computed z is greater than 1.645; otherwise,reject it.
C)Do not reject the null hypothesis if computed z lies between −1.960 and +1.960; otherwise,reject it.
D)Reject the null hypothesis if computed z is below −1.960; otherwise,reject it.

Question

Quizplus · Accepted Answer

Since the alternate hypothesis suggests the mean could be either more or less than $50,000, it's a two-tailed test. For a significance level of 0.10 in a two-tailed test, the critical z-values are ±1.645.

The Mean Annual Income of Certified Welders Is Normally Distributed