If you wish to determine there is evidence that average starting salary for finance graduates exceeds $42,000, then you should formulate the null and alternative hypotheses such that:
A) either a two-tailed or one-tailed test could be used
B) a two-tailed test should be used
C) a one-tailed test should be used
D) the probability of committing a Type II error is equal to 0.42
E) a two-tailed test should be used and the probability of committing a Type II error is equal to 0.42

Question

Quizplus · Accepted Answer

If we wish to determine there is evidence that average starting salary for finance graduates exceeds $42,000, we should use a one-tailed test. The null hypothesis would be that the average starting salary for finance graduates is less than or equal to $42,000, while the alternative hypothesis would be that the average starting salary for finance graduates is greater than $42,000. This is because we are only interested in detecting if there is evidence of a difference in one direction (above $42,000) and not interested in detecting if there is evidence of a difference in both directions.

If You Wish to Determine There Is Evidence That Average