Problem #38: Electricity Consumption

The U.S. Energy Information Association claims that the mean monthly residential electricity consumption in your town is more than 874 kilowatt-hours (kWh). You want to test this claim. You find that a random sample of 64 residential customers has a mean monthly electricity consumption of 905 kWh. Assume the population standard deviation is 125 kWh. At = 0.05, do you have enough evidence to support the association's claim? (Adapted from U.S. Energy Information Association)

1. Identify the claim and state H_o and H_a
2. Find the critical value(s) and identify the rejection region(s)
3. Find the standardized test statistic z
4. Decide whether to reject or fail to reject the null hypothesis, and
5. Interpret the decision in the context of the original claim.