A model relating fertilizer use to cotton yield is estimated using 62 observations, and the following estimates are obtained:
= 15.43 + 0.12 (3.2431) (0.0371)
where Y is the cotton yield in bushels/acre and X is the amount of fertilizer used in lb/acre. Standard errors of estimates are given in parentheses.
A: Formulate the appropriate null hypothesis, , and alternative hypothesis, , to test if fertilizer use has a positive effect on cotton yield. Calculate the test statistic and perform the test at 5 percent significance level. What is your conclusion?
B: Suppose the null hypothesis you constructed in part A is true. What is the probability of a Type I error?