The employees at the East Vancouver office of a multinational company are demanding higher salaries than those offered at the company office located in Oshawa Ontario. Their justification for the pay difference is that the difference between the average price of single-family houses in East Vancouver and that in Oshawa is more than $60,000. Before making a decision, the company management wants to study the difference in the prices of single-family houses for sale at the two locations. The results of their search of recent house sales are as follows (in $1000, rounded to the nearest thousand):
Assuming that the population distributions are approximately normal, can we conclude at the 0.05 significance level that the difference between the two population means is greater than $60,000?
This example is what type of test?
A) One sample test of means.
B) Two sample test of means.
C) Paired t-test.
D) Test of proportions.

Question

The employees at the East Vancouver office of a multinational company are demanding higher salaries than those offered at the company office located in Oshawa Ontario. Their justification for the pay difference is that the difference between the average price of single-family houses in East Vancouver and that in Oshawa is more than $60,000. Before making a decision, the company management wants to study the difference in the prices of single-family houses for sale at the two locations. The results of their search of recent house sales are as follows (in $1000, rounded to the nearest thousand):
 Assuming that the population distributions are approximately normal, can we conclude at the 0.05 significance level that the difference between the two population means is greater than $60,000?
This example is what type of test?
A) One sample test of means. 
B) Two sample test of means. 
C) Paired t-test. 
D) Test of proportions.

Quizplus · Accepted Answer

The type of test required in this scenario is a two sample test of means as we are comparing two different samples (East Vancouver and Oshawa) and trying to determine if there is a statistically significant difference between their means. Additionally, we are given information about the population distributions being approximately normal, which is a requirement for a t-test. The other options (one sample test of means, paired t-test, and test of proportions) do not fit the requirements of this scenario.

The Employees at the East Vancouver Office of a Multinational