Paige Thomsen is about to graduate from college at a local university in San Francisco. Her options are to look for a job in San Francisco or go home to Denver and search for work there. Recent data suggest that average starting salaries for college graduates is $48,900 in San Francisco and $40,900 in Denver (Forbes, June 26, 2008). Suppose these data were based on 100 recent graduates in each city where the population standard deviation is $16,000 in San Francisco and $14,500 in Denver. Determine whether the average starting salary in San Francisco is greater than Denver’s average starting salary at the 5% significance level.
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