A Recent Survey Was Conducted to Compare the Cost of Solar

question 104

Multiple Choice

A recent survey was conducted to compare the cost of solar energy to the cost of gas or electric energy. Results of the survey revealed that the distribution of the amount of the monthly utility bill
Of a 3-bedroom house using gas or electric energy had a mean of $110 and a standard deviation of
$14. Three solar homes reported monthly utility bills of $63, $64, and $60. Which of the following
Statements is true?

• A)Homes using solar power may actually have higher utility bills than homes using only gas and electricity.
• B)Homes using solar power may have lower utility bills than homes using only gas and electricity.
• C)The utility bills for homes using solar power are about the same as those for homes using only gas and electricity.
• D)Homes using solar power always have lower utility bills than homes using only gas and electricity.

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Definitions:

Expected Utility Maximizer

An economic theory that assumes individuals choose among risky alternatives in such a way as to maximize their expected utility.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Contingent Commodity Bundles

A theoretical concept in economics, referring to a collection of goods or services whose provision is dependent on specific conditions or states of the world.

Probability

The measure of the likelihood that an event will occur, expressed between 0 and 1.