Exhibit 19-3
It is believed that the median yearly income in a suburb of Atlanta is $70,000. A sample of 67 residents was taken. Thirty-eight had yearly incomes above $70,000, 26 had yearly incomes below $70,000, and 3 had yearly incomes equal to $70,000. The null hypothesis to be tested is H 0 : median = $70,000.
-Refer to Exhibit 19-3. The p-value for this test is
A)0.4332
B)0.8664
C)0.0668
D)0.1336

Question

Quizplus · Accepted Answer

The p-value is calculated based on the binomial distribution for the number of incomes above $70,000. With 38 out of 64 (excluding the 3 equal) incomes above $70,000, the p-value is 0.1336.

Exhibit 19-3 It Is Believed That the Median Yearly Income in a in a Suburb