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Suppose we have data on nonunionized manufacturing firms and want to estimate the rela- tionship between the scrap rate and other firm characteristics. Let

  

Suppose we have data on nonunionized manufacturing firms and want to estimate the rela- tionship between the scrap rate and other firm characteristics. Let the estimated model be defined as: In(scrap) 11.75 -0.04 HrsEmp-0.95 In(sales) + 1.50 In(employ) = (4.57) (0.02) (0.37) n=50, R 0.20 = (0.32) (8) where the variables scrap is the scrap rate, HrsEmp is total hours worked, sales is total sales revenue in thousands, and employ is total number of employees. Standard errors are denoted in parentheses under each parameter estimate. (a) Define the null and alternative hypothesis for a one sided hypothesis test on the pa- rameter associated with the variable employ. (b) Conduct the hypothesis test at the 5% significance level.

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