Exhibit 18-6
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 18-6. 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 using the binomial test for the median. With 38 incomes above $70,000 and 26 below, the test statistic is based on the number of incomes above the median. The p-value is approximately 0.1336.

Exhibit 18-6 It Is Believed That the Median Yearly Income in a in a Suburb