Refer to Exercise. Suppose that y is the profit for some business and x is the amount of capital...

Refer to Exercise. Suppose that y is the profit for some business and x is the amount of capital invested, and you know that the rate of increase in profit for a unit increase in capital invested can only decrease as x increases. You want to know whether the data provide sufficient evidence to indicate a decreasing rate of increase in profit as the amount of capital invested increases.

a. The circumstances described imply a one-tailed statistical test. Why?

b. Conduct the test at the 1% level of significance. State your conclusions.

Exercise:

Suppose that you fit the model

E(y) = β₀ + β₁x + β₂x²

to 20 data points and obtained the accompanying

MINITAB printout.

MINITAB output for Exercise

Regression Analysis: y versus x, x-sq