How productive are employees? One way to answer this question is to study annual company profits per employee. Let x1 represent annual profits per employee in computer stores in St. Louis. A random sample of n1 = 11 computer stores gave a sample mean of x1 = $25,200 profit per employee with sample standard deviation s1 = $8,400. Another random sample of n2 = 9 building supply stores in St. Louis gave a sample mean x2 = $19,900 per employee with sample standard deviation s2 = $7,600. Does this indicate that in St. Louis computer stores tend to have higher mean profits per employee? Use α = 0.01. a) State the null and alternate hypotheses. Will we use a left-tailed, right-tailed, or two-tailed test? What is the level of significance? b) Identify the sampling distribution to be used: standard normal or the Student’s t. Compute the z or t value of the sample test statistic and sketch its location. c) Find the P value for the sample test statistic. d) Should we reject or fail to reject the null hypothesis?

How productive are employees? One way to answer this question is to study annual company profits per employee. Let x1 represent annual profits per employee in computer stores in St. Louis. A random sample of n1 = 11 computer stores gave a sample mean of x1 = $25,200 profit per employee with sample standard deviation s1 = $8,400. Another random sample of n2 = 9 building supply stores in St. Louis gave a sample mean x2 = $19,900 per employee with sample standard deviation s2 = $7,600. Does this indicate that in St. Louis computer stores tend to have higher mean profits per employee? Use α = 0.01.

a) State the null and alternate hypotheses. Will we use a left-tailed, right-tailed, or two-tailed test? What is the level of significance?
b) Identify the sampling distribution to be used: standard normal or the Student’s t. Compute the z or t value of the sample test statistic and sketch its location.
c) Find the P value for the sample test statistic.
d) Should we reject or fail to reject the null hypothesis?