The U. S. Energy Information Administration claimed that U. S. residential customers used an average of 10,608 kilowatt hours (kWh) of electricity this year. A local power company believes that residents in their area use more electricity on average than EIA's reported average. To test their claim, the company chooses a random sample of 187 of their customers and calculates that these customers used an average of 10,737 kWh of electricity last year. Assuming that the population standard deviation is 1220 kWh, is there sufficient evidence to support the power company's claim at the 0.05 level of significance? 1. State the null and alternative hypotheses for the test.
2. What is the test statistic?
3. Do we fail to reject or reject the null hypothesis because of sufficient or insufficient evidence?