Refer to Exercise 13.5. Suppose that y is the profit for some business and x is the amou...

Refer to Exercise 13.5. 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.

Reference:

Suppose that you fit the model

to 20 data points and obtained the accompanying MINITAB printout.

a. What type of model have you chosen to fit the data?

b. How well does the model fit the data? Explain.

c. Do the data provide sufficient evidence to indicate that the model contributes information for the prediction of y? Use the p-value approach.