How strong is the association between labor productivity and labor costs? Data from the Bureau of Labor Statistics for labor productivity, as measured by Output per Hour, and Unit Labor Costs across 53 industries, are used to examine this relationship.
a) From a scatterplot, is there evidence of a linear association between Labor Productivity and Unit Labor Costs? Plot the reciprocal, Hours per output (000s), against Unit Labor Costs. Why did the analysts prefer this measure of productivity?
b) Using the reciprocal measure, Hours per Output (000s), test an appropriate null hypothesis and state an appropriate conclusion (assume that assumptions and conditions are now met).