Chapter 9, Problem 57SE

The unemployment rate for 18- to 34-year-olds was reported to be 10.8% (The Cincinnati Enquirer, November 6, 2012). Assume that this report was based on a random sample of four hundred 18-to 34-year-olds.

1. a. A political campaign manager wants to know if the sample results can be used to conclude that the unemployment rate for 18- to 34-years-olds is significantly higher than the unemployment rate for all adults. According to the Bureau of Labor Statistics, the unemployment rate for all adults was 7.9%. Develop a hypothesis test that can be used to see if the conclusion that the unemployment rate is higher for 18- to 34-year-olds can be supported.
2. b. Use the sample data collected for the 18- to 34-year-olds to compute the p-value for the hypothesis test in part (a). Using α = .05, what is your conclusion?
3. c. Explain to the campaign manager what can be said about the observed level of significance for the hypothesis testing results using the p-value.