Question

The number of "destination weddings" has skyrocketed in recent years. For example, 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 $30,000. Listed below is a total cost in $000 for a sample of 8 Caribbean weddings. At the 0.05 significance level, is it reasonable to conclude the mean wedding cost is less than $30,000 as advertised?

31.7	30.5	31.4	28.6	29.2	29.4	29.6	28.5

1. State the null hypothesis and the alternate hypothesis. Use a 0.05 level of significance. (Enter your answers in thousands of dollars.)

b. State the decision rule for 0.05 significance level. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)

3. Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 3 decimal places.)
4. What is the conclusion regarding the null hypothesis?

Answer 1

(a)

H0 : ? =30

H1 : ? <30

(b)

Degrees of freedom = n-1 = 8 - 1 = 7

(c)

(d) By decision rule, we fail to reject H0.