Question

A company claims that the mean monthly residential electricity consumption in a certain region is more than 870 kilowatt-hours (kWh). You want to test this claim. You find that a random sample of 63 residential customers has a mean monthly consumption of 900 kWh. Assume the population standard deviation is 130 kWh. At alphaα equals=0.10, can you support the claim?

Answer 1

This hypothesis test is a two tailed test .

The null and alternative hypothesis is

H₀ : = 870

H_a : > 870

Test statistic = z

= ( - ) /    / n

= (900 - 870) / 130 / 63

= 1.832

Test statistic = 1.832

P-value = 0.0335

P-value <

Reject the null hypothesis .

There is sufficient evidence to conclude that the mean monthly residential electricity

consumption in a certain region is more than 870 kilowatt-hours (kWh) .