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.