1. The Bureau of Labor Statistics reported that the average yearly income of dentists in the
year 2009 was $110,000. Dr. Smith thinks there has been a significant increase in the average
yearly income of dentists. He has a dataset of a sample of 81 dentists, which was taken in
2010, showed an average yearly income of $120,000. Assume the standard deviation of the
population of dentists in 2010 is $36,000. Please answer the following questions:
(a) Develop appropriate null and alternative hypotheses such that rejection of H0
will support Dr. Smith’s argument.
(b) Compute the test statistic.
(c) Determine the p-value; and at 95% confidence, test the hypotheses.
[Hint: This is an One-tailed Hypothesis Testing. Please see Chap009 – Slides 17-30 for
detailed explanation. Please also see page 383-389 in the textbook.]
2. A sample of 64 account balances from a credit company showed an average daily balance
of $1,040. The standard deviation of the population is known to be $200. We are interested
in determining if the mean of all account balances (i.e., population mean) is significantly
different from $1,000.
Question: Using the p-value approach at 95% confidence, test the above hypotheses.
[Hint: This is a Two-tailed Hypothesis Testing. Please see Chap009 – Slides 31-41 for
detailed explanation. Please also see page 389-393 in the textbook.]
Please type your answer and the steps of computation in a Word file. (Please DO NOT
just write the answer. Show the steps that you solve the problems. Partial credit will be
given based on your computation steps.) Please save the file as “BADM216 Hw6_Your First
