Question

An industrial plant wants to determine which of two types of fuel, electric or gas, is more cost efficient (measured in cost per unit of energy). Independent random samples were taken of plants using electricity and plants using gas. These samples consisted of 11 plants using electricity, which had a mean cost per unit of $42.1 and standard deviation of $8.46, and 15 plants using gas, which had a mean of $50.3 and standard deviation of $7.9. Assume that the populations of costs per unit are normally distributed for each type of fuel, and assume that the variances of these populations are equal. Can we conclude, at the 0.05 level of significance, that the mean cost per unit for plants using electricity, μ1, differs from the mean cost per unit for plants using gas, μ2? Perform a two-tailed test. Then fill in the table below.

Carry your intermediate computations to at least three decimal places and round your answers as specified in the table.

Null Hypothesis: ?

Alternative Hypothesis: ?

Type of test statistic: ? (z, t, chi square, F)

The value of the test statistic: ? (round to 3 decimal places)

The p-value: ? (Round to 3 decimal places)

Can we conclude that the mean cost per unit for plants using electricity differs from the mean cost per unit for plants using gas? (yes or no)

Answer 1