Econ 6050 Case Assignment

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Econ 6050 Assignment #3 Question #1 Once we average the income samples from each major, we discover that the average earned by those graduates who majored in economics is $30,206 while the average earned by those graduates who majored in marketing is $27,196. In looking at only the mean of the samples, it seems that those who major in economics will earn more, but we should also consider if this is only due to a sampling error. In testing the data, we can set up the following hypothesis: Let Ho: Mecon = Mmkt │ D = Mecon – Mmkt = 0 Ha: Mecon ≠ Mmkt │ D = Mecon – Mmkt ≠ 0 After testing, we reject the data because the difference is too great to be due to sampling error. We discover that there is a 95% chance that the true difference in the mean is between 2141 and 3881. This means that those who major in economics in contrast to marketing are more likely to make more money on average. Question #2 In Hazelwood (a suburb of St. Louis), African-Americans were not happy with the city because they believed that they were not fairly represented among teachers in the city. African-Americans make up 5.7% of the population in the city. However, out of the 405 teachers in the school system sample, they were represented by 15 teachers, which is only about 3.7%. To properly test whether African-Americans are underrepresented, the following hypothesis can be formed: Let Ho: Proportion of African-Americans teaching in school system = Proportion of African-Americans in the city Ha: Proportion of African-Americans teaching in school system ≠ Proportion of African-Americans in the city We will not decide to reject our null hypothesis after testing these hypotheses because the difference is not too great to be due to sampling error. This shows that the African-Americans are not underrepresented in the school system. It is also discovered that there is a
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