Question

**5) Cost of Residential Water**. On its municipal website, the city of Tulsa states that the rate it charges per 5 CCF of residential water is $21.62. How do the residential water rates of other US public utilities compare to Tulsa’s rate? The file *ResidentialWater* contains the rate per 5 CCF of residential water for 42 randomly selected US cities.

- Formulate hypotheses that can be used to determine whether the population mean rate per 5 CCF of residential water charged by US public utilities differs from the $21.62 rate charged by Tulsa.
- What is the p-value for your hypothesis test in part (a)?
- At a = .05, can your null hypothesis be rejected? What is your conclusion?
- Repeat the preceding hypothesis test using the critical value approach.

Public Utility Company | Rate (5 CCF) |

Orlando Utilities Commission | $10.48 |

Memphis Light, Gas and Water | $9.18 |

Central Arkansas Water | $11.80 |

City of Phoenix Water System | $6.50 |

City of Lincoln Water System | $12.42 |

San Antonio Water System | $14.53 |

Salt Lake City Public Utilities | $15.56 |

Nashville Metro Water Services | $10.12 |

City of Dover Water System | $14.50 |

Lakeland Electric | $16.18 |

Huntsville Utilities | $17.60 |

Omaha Metropolitan Utilities District | $19.18 |

Jacksonville Electric Authority | $17.98 |

City of Dallas Water System | $12.85 |

City of St. Louis Water System | $16.80 |

Charleston Water System | $17.35 |

City of Clewiston Water System | $15.64 |

Springfield (IL) City Water, Light and Power | $14.80 |

City Of Milwaukee Water System | $18.91 |

Detroit Sewerage and Water Department | $17.99 |

City of Charlotte Water System | $14.90 |

Louisville Water Company | $18.42 |

City of Jackson (MS) Water System | $16.05 |

Las Vegas Valley Water District | $26.85 |

City of Columbus OH Water System | $22.32 |

City of Oklahoma City - Utilities | $22.76 |

Jackson TN Energy Authority | $20.98 |

Knoxville Utilities Board | $23.45 |

New York City Water Board | $19.05 |

Reno Truckee Meadows Water Authority | $23.70 |

Chattanooga American Water Company | $19.26 |

Marietta Board of Lights & Water | $23.75 |

City Utilities of Springfield MO | $27.80 |

Indianapolis Citizens Energy Group | $27.05 |

City of Philadelphia Water System | $27.14 |

LA Sewerage and Water Board of New Orleans | $26.99 |

Boston Water and Sewer Commission | $24.68 |

Birmingham Water Works | $37.86 |

Austin Water | $26.51 |

City of Bellevue Water System | $39.01 |

City of Los Angeles Water System | $29.46 |

Peoria American Water | $41.65 |

Step 1

5.

1)

The hypothesis for checking whether the population mean rate per 5 CCF of residential water charged by US public utilities differs from $21.62 rate charged by Tulsa or not.

**Null Hypothesis:**

*H*_{0}: µ=21.62.

That is, the population mean rate per 5 CCF of residential water charged by US public utilities is equal to $21.62.

**Alternative Hypothesis:**

** **

*H*_{a}: µ≠21.62.

** **

That is, the population mean rate per 5 CCF of residential water charged by US public utilities is different from $21.62.

Step 2

2)

The *p*-value for the hypothesis testing is ** 0.2568** and it is obtained below:

The mean value for the given sample observations is 20.2383 and it is calculated by using Excel function, “**=AVERAGE (A2:A43)”.**

The standard deviation is 7.7991 and it is calculated by using Excel function,

**“=STDEV (A2:A43)”**.

The number of sample observations is *n*=42.

The degree of freedom is, *n *– 1 = 42– 1 = 41.

Step 3

The value of P(t<-1.15) is 0.1284 and it is obtained by using the Excel function

**“=T.DIST(-1.15 (te...**

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