Setup: You work for a company that has recently done a salary evaluation of its employees. The company took a simple random sample of 40 employees and collected data for those sampled. The following results were reported from the analysis: â€¢ Sample size = 40 â€¢ Sample mean = $55,000 â€¢ Sample median = $42,000 â€¢ 95% confidence interval for mean ($35,000, $75,000)
Instructions: Using the information given in the setup above answer (in paragraph form) the following questions using your knowledge about statistics.
The head of the company would like to make the following statement: â€œThe average (mean) salary for all of our employees is $55,000.â€ Discuss how this is not an accurate statement. You must include the following:
a. Talk about the difference between a statistic and a parameter in the context of the situation.
b. Talk about what would happen if you were to draw a different random sample of 40 employees.
c. Suggest what would be the correct way to give an idea of what the average salary for all of the employees might be.