Based on the sample data below, is the average Medicare spending in the northern region significantly less than the average spending in the southern region at the 1 percent level?

(a) What is the hypothesis and decision rule.

(b) What is the test statistic assuming unequal variances.

(c) What is your conclusion. Is this a strong conclusion?

Medical Spending per Patient (adjusted for age, sex, and race)

Statistic Northern Region Southern Region

Sample mean $ 3,123 $ 8,456

Sample Standard Deviation $ 1,546 $3,678

Sample Size 14 patients 16 patients