Question

In order to determine whether or not there is a significant difference between the hourly wages of two companies, the following data have been accumulated.

Company 1 Company 2 n1 = 80 n2 = 60 x̄1 = $10.80 x̄2 = $10.00 σ1 = $2.00 σ2 = $1.50 Refer to Exhibit 10-13. The point estimate of the difference between the means (Company 1 – Company 2) is _____.

a. .8
b. –20
c. .50
d. 20

Answer 1

a. .8

Explanation:

The point estimate of the difference between the means of Company 1 and Company 2 can be calculated as:

point estimate = mu1 - mu2 where

• mu1 is the sample mean hourly wage of Company 1

• mu2 is the sample mean hourly wage of Company 2

Therefore point estimate = $10.80- $10 =$ .8