The Owners of an Industrial Plant Want to Determine Which $H _ { 0 } : \left( \mu _ { e } - \mu _ { g } \right) = 0$

question 55

Short Answer

The owners of an industrial plant want to determine which of two types of fuel (gas or electricity) will produce more useful energy at a lower cost. The cost is measured by plant investment per delivered quad ($ invested /quadrillion BTUs). The smaller this number, the less the industrial plant pays for delivered energy. Suppose we wish to determine if there is a difference in the average investment/quad between using electricity and using gas. Our null and alternative hypotheses would be: A) $H _ { 0 } : \left( \mu _ { e } - \mu _ { g } \right) = 0$ vs. $H _ { a } : \left( \mu _ { e } - \mu _ { g } \right) \neq 0$
B) $H _ { 0 } : \left( \mu _ { e } - \mu _ { g } \right) = 0$ vs. $H _ { a } : \left( \mu _ { e } - \mu _ { g } \right) > 0$
C) $H _ { 0 } : \left( \mu _ { e } - \mu _ { g } \right) = 0$ vs. $H _ { a } : \left( \mu _ { e } - \mu _ { g } \right) < 0$
D) $H _ { 0 } : \left( \mu _ { e } - \mu _ { g } \right) = 0$ vs. $H _ { a } : \left( \mu _ { e } - \mu _ { g } \right) = 0$

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Definitions:

T-Shirts

A type of clothing characterized by short sleeves and typically made of cotton fabric.

Coffee

A brewed drink prepared from roasted coffee beans, the seeds of berries from certain Coffea species.

Giffen Good

The hypothetical inferior good for which the income effect outweighs the substitution effect and the demand curve slopes upward.

Income Effect

The dynamics of income change in a person or an economy, and its role in altering the demand pattern for goods and services.