Question

The cost of weddings in the United States has skyrocketed in recent years. As a result, many couples are opting to have their weddings in the Caribbean. A Caribbean vacation resort recently advertised in Bride Magazine that the cost of a Caribbean wedding was less than $10,000. Listed below is a total cost in $000 for a sample of 8 Caribbean weddings. At the 0.025 significance level is it reasonable to conclude the mean wedding cost is less than $10,000 as advertised?

12.4

8.5

10.1

12.6

10.5

9.1

9.8

11.2

a.	State the null hypothesis and the alternate hypothesis. Use a .025 level of significance. (Enter your answers in thousands of dollars.)

H0: μ ≥ ______
H1: μ < ______

b.	State the decision rule for 0.025 significance level. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)

Reject H0 if t < ______

c.	Compute the value of the test statistic. (Negative amount should be indicated by a minus sign.Round your answer to 3 decimal places.)

Value of the test statistic ______

d.	What is the conclusion regarding the null hypothesis?

(Do not rejec or tReject H0). The cost is (not less or less) than $10,000.

Answer 1

a)
H0 : mu = 10000
H1 : mu < 10000

b)

This is a one tailed test

Critical value = -2.365

reject Ho if t < -2.365

c)
From the gievn data,
xbar = 10.53
s = 1.4695

t = (xbar -mu0/(s/sqrt(n))
= ( 10.53 - 10)/(1.4695/sqrt(8))
= 1.020

d)

DO not reject H0 the cost is not less than 10000