Headhunters locate candidates to fill vacant senior positions in companies. These placement companies are typically paid a percentage of the salary of the filled position. A placement company that specializes in biostatistics is considering a move into information technology (IT). It earns a fee of 15% of the starting salary for each person it places. Its numerous placements in biostatistics had an average starting salary of $125,000. Its first 50 placements in IT had an average starting salary of $140,000 1s = $20,0002 but produced higher costs at the agency. If each placement in IT has cost the placement company $1,200 more than each placement in biostatistics, should the firm continue its push into the IT industry?
(a) State the null and alternative hypotheses. Describe the parameters.
(b) Describe Type I and Type II errors in this context.
(c) Find the p-value of the test. Do the data supply enough evidence to reject the null hypothesis if a = 0.10? (Assume that the data meet the sample size condition.)