Business and Management
A recent study considered the effects of innovation on employment in Latin America.7 It seems reasonable that as more firms produce new products, they would need more workers, and employment would rise. For small firms in Argentina, let y be the yearly percentage of employment growth and x be the percentage of small firms that are product or process innovators. Assume the estimated regression line is y = 25.399 + 5.790x.
a. Find the expected percentage in employment growth if the percentage of product or process innovators is 2%.
b. Find an estimate of an observed value y for x = 3.5.
c. Suppose σ = 1.5. Find the probability that an observed y value is more than 19 when x = 4.
d. Suppose x = 0.9%. Find the expected value of y and interpret this result.