Problem: In the population, the average IQ is 100. A team of scientist wants to test a new medication to see if it has either a positive or negative effect on intelligence, or no effect at all. A sample of 30 participants who have taken the medication has a mean of 140 with a standard deviation of 20. Did the medication affect intelligence? Alpha = 0.05.

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Illustrative Example: 1. A manufacturing firm claims that the average income of their employees per day is Php325. A random sample of 25 employees were tested and found to have a mean daily income of Php310 with a standard deviation of 4.5. Test hypothesis that u = 325 against alternative u