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
$124.00 and a standard deviation of $15.00. Assuming the distribution is
mound-shaped and symmetric, would you expect to see a 3-bedroom house using gas
or electric energy with a monthly utility bill of $236.50 ? Explain.
The z-score for the value $236.50 is:
z =
x - x
s
=
236.5 - 124
15
= 7.5
An observation that falls 7.5 standard deviations above the mean is very unlikely. We would not expect to see a
monthly utility bill of $236.50 for this home.
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