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 0.01 significance level, is it reasonable to conclude the mean wedding cost is less than $30,000 as advertised?

28.6	31.4	29.4	29.7	29.7	29.6	28.9	30.7

1. State the null hypothesis and the alternate hypothesis. Use a 0.01 level of significance. (Enter your answers in thousands of dollars.)

2. State the decision rule for 0.01 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

We compute the mean and standard deviation of the sample as :

Now, we conduct the T-test for one population mean as :

Hence, there is not sufficient evidence to conclude that the mean wedding cost is less than $30,000 as advertised at 1% level of significance.