In 1997, the average household expenditure for energy was $1,338, according to data obtained from the U. S. Department of Energy. An economist claims that energy usage today is different from its 1997 level. In a random sample of 36 households, the economist found the mean expenditure, adjusted for inflation, for energy in 2004 to be $1,423. with a sample standard deviation s = 360.

At a 95% level of confidence (α = .05), we wish to test the economists claim. State the Null Hypothesis and Alternate Hypothesis for this experiment.

Null hypothesis H0: µ = $1,338

Alternative hypothesis Ha: µ ≠ $1,338

Which means;

Null hypothesis H0; the average household expenditure for energy is equal to $1,338

Alternative hypothesis Ha; the average household expenditure for energy is not equal to $1,338

Step-by-step explanation:

The null hypothesis (H0) tries to show that no significant variation exists between variables or that a single variable is no different than its mean. While an alternative Hypothesis (Ha) attempt to prove that a new theory is true rather than the old one. That a variable is significantly different from the mean.

Therefore, for the case above;

Null hypothesis H0: µ = $1,338

Alternative hypothesis Ha: µ ≠ $1,338

Which means;

Null hypothesis H0; the average household expenditure for energy is equal to $1,338

Alternative hypothesis Ha; the average household expenditure for energy is not equal to $1,338

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