The Department of Labor would like to test the hypothesis that the average hourly wage for recent college graduates is less than $20. A random sample of 24 recent college graduates averaged $19.30 per hour with a standard deviation of $3.20 per hour. The Department of Labor would like to set the significance level to 10%.
a. Write down the null and alternative hypotheses.
b. What is the critical value?
c. Calculate the test statistic.
d. Compare the test statistic with the critical value. Do you reject or fail to reject the null hypothesis?
e. In words, state your conclusion and interpret the results of the hypothesis test.