Question

The cost of a wedding 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 that the cost of a Caribbean wedding was less than $10 000. Listed below is the total cost (in $ thousands) for a sample of eight Caribbean weddings:

$10.0

$9.8

$9.1

$9.4

$9.6

$10.5

$10.8

$10.7

a. State the null hypothesis and the alternate hypothesis. (Enter the final answers in thousands of dollars.)

H₀: μ ≥           

H₁: μ <           

b. State the decision rule for 0.10 significance level. (Negative answer should be indicated by a minus sign. Round the final answer to 3 decimal places.)

Reject H₀ if t <            .

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

Value of the test statistic           

d. At the 0.10 significance level, is it reasonable to conclude the mean wedding cost is less than $10,000 as advertised?

(Click to select)  Reject  Do not reject  H₀. There is  (Click to select)  enough  not enough  evidence to conclude that the cost is less than $10,000.

Answer 1

a)

H0: >= 10

Ha: < 10

b)

t critical value at 0.10 significance level with 6 df = -1.440

Decision rule = Reject H0, if t < -1.440

c)

From sample data,

= 9.8857 , S = 0.6012

Test statistics

t = ( - ) / ( S /sqrt(n) )

= ( 9.8857 - 10) / ( 0.6012 / sqrt ( 7 ) )

= -0.503

d)

Since test statistics > -1.440 , Do not reject H0.

Do not reject  H0. There is not enough  evidence to conclude that the cost is less than $10,000.