The average starting salary of students who graduated from colleges of Business in 2009 was $48,400. A sample of 100 graduates of 2010 showed an average starting salary of $50,000. Assume the standard deviation of the population is known to be $8,000. We want to determine whether or not there has been a significant increase in the starting salaries.

a. State the null and alternative hypotheses to be tested

b. Compute the test statistic

c. The null hypothesis is to be tested at 95% confidence. Determine the critical value for this test.

d. What do you conclude?

e. Compute the p-value

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