Answer Happy

In this question, let us suppose the following population model holds: In(earnings) = Bo + B education + Bzage + Buage? + B3 In(hours) +u =
(d)(1pt) A union commissions us to investigate if earnings increase proportionally to working hours or not. That is, we want to test if an x% increase in work hours translates to an x% increase in earnings (i.e. if the elasticity of earnings with respect to work hours is equal to 1). Write down the null hypothesis and alternative hypothesis of this two- sided test.