21. The estimation of a Cobb-Douglas production function for 20 firms of a given industryyields:4. 16.907+0.322k; +2.777liR2 = 0.915 DW = 2.032 RSS = 0.461 Use α = 5%4.939971Var ẞ=0.2166390.031857-0.857446 -0.057229 0.166070/where fitted values of naturals logarithms of output (output express in 1000 tons);ki: natural logarithms of capital output (output express in 1000 tons)l: natural logarithms of labour (labour is in hours)RSS: residual sum of squares1: firm indexVar ẞ: variance-covariance matrix of estimatesEvaluate the statistical significance of the coefficients.

The statistical significance of coefficients in a regression model indicates whether the…

Answered: 21. The estimation of a Cobb-Douglas…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter9: Applications Of Cost Theory

Section: Chapter Questions

Problem 3E

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1. The estimation of a Cobb-Douglas production function for 20 firms of a given industry yields: = 16.907 + 0.322k₁ + 2.777l₁ R² = 0.915 DW = 2.032 RSS=0.461 Use a = 5% Var ß= 0.166070 0.031857 0.216639 -0.857446 -0.057229 4.939971/ where : fitted values of naturals logaritrhms of output (output express in 1000 tons); k₁: natural logaritrhms of capital output (output express in 1000 tons) l: natural logaritrhms of labour (labour is in hours) RSS: residual sum of squares t: firm index Var ß: variance - covariance matrix of estimates a. Evaluate the statistical significance of the coefficients.
1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. 2.38 0.006153Q 0.000005359Q² 19.2X1 C + + (2.62) (2.84) (3.16) (3.50) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: t0.025,7€ 1.99 .) Check all that apply. X1 Q2 What type of average cost-output relationship is suggested by these statistical results? Quadratic Linear Cubic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in…
Question 6 The estimation of a Cobb-Douglas production function for 20 firms of a given industry yields: = a. 16.907 + 0.322k; + 2.777lį R² = 0.915 DW = 2.032 RSS = 0.461 Use a = 5% Var ß = 0.166070 0.031857 0.216639 -0.857446 -0.057229 4.939971/ where : fitted values of naturals logaritrhms of output (output express in 1000 tons); ki: natural logaritrhms of capital output (output express in 1000 tons) li: natural logaritrhms of labour (labour is in hours) RSS: residual sum of squares 1: firm index Var ß: variance covariance matrix of estimates Evaluate the statistical significance of the coefficients. Page 4 of 12 b. A regression on the original regressors, q² and a constant term yields the following statistics: R² = 0.296041 F = 1.177507 coeff of ² has a t-statistic of 2.876 (i) With this information, which test can you implement to deal with the problem omitted variables and why? (ii) Implement the test as stated in b(i) and interpret the results. (iii) What is (are) the…
A company makes solar panels. The company's revenue function, in dollars, is R(n)= 10n , where n is the number of panels produced. The cost function is C(n) = 100(2)30 . R and C are shown on the graph below. 1000 800 600 400 200 20 40 60 80 100 1 Number of Panels a) Estimate from the graph i) the break-even points e) How would your answers for break-even points and maximum profit change if i) the number of dollars of revenue per panel is increased slightly? ii) the cost function is changed to C(n)=100(2)35 ? f) What does the number that was changed in part e) ii) represent? Dollars
A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. Determinethe Marginal cost and interpret the results.
10K L%. 1). Consider the production function Q = (a) What is the output when K = 100000 and L = 243? (b) Use the marginal analysis to estimate Q(99995, 243) and Q(100000, 245). (c) Use a calculator to compute these two values of Q to three decimal places and compare these values with your estimates in (b). (d) How big must AL be in order for the difference between Q(100000, 243+AL) and its linear approximation Q(100000, 245) + -DAL, to differ by more than two units?
You are given the following cost functions: TC=100+60Q−3Q2+0.1Q3TC=100+60Q−3Q2+0.1Q3 TC=100+60Q+3Q2TC=100+60Q+3Q2 TC=100+60QTC=100+60Q b). In each case, indicate the point at which diminishing returns occur. also indicate the point of maximum cost efficiency (i.e., the point of minimum average cost). c). For each function, discuss the relationship between marginal cost and average variable cost and between marginal cost and average. Discuss the relationship between average variable cost and average cost.
Given: Q = 100K0.6L0.8; w = 50; r = 80; Q0 = 2,000. Graphically illustrate the expansion path for the firm if it decides to increase its target output to Q1 = 4,000.
show solution An oil refinery produces one base type of crude oil. The total cost is given by the equation Total Cost, TC = 50,000+20.2D +0.0001D2. The sales price in dollars per barrel is 35. At what level of production in barrels/week is cost/barrel minimum? What is the minimum cost per barrel? What is the maximum weekly profit that the company can make? At what level of production is the maximum weekly profit attainable? and Over what range of production is profit possible? Express answers in whole numbers and write the numerical values only.
Please no written by hand and no emage Suppose that a company that makes and sells hand-crafted artwork has a cost function C(x) = 24x + 300, where x is the number of items made, and a revenue function R(x) = 45x, where x is the number of items sold. What is the profit from the 28th item made and sold? There is a $ sign listed next to the answer box, so do not type a $ sign in your answer.
Profit Analysis Unendo, is a large computer game manufacturer. They have estimated that the demand function for their game "Star Wars Battlefront III" is as follows... STAR WARE BATTLEFRONT p = 86 - 0.05q where p is the price of a game and q is the number of game produced and sold per week. They estimate that their cost function in dollars is ... Clq) = 179 + 5000; where the fixed cost is $5000 and the marginal cost is $17 per game Unendo wishes to maximize the weekly profit of producing and selling the game. Find the maximum profit they can earn. (Round your answer to 2 decimal places, if necessary)
A company has established that the relationship between the sales price for one of its products and the quantity sold per month is approximately p = 75 – 0.1D units (D is the demand or quantity sold per month and p is the price in dollars). The fixed cost is $1,000 per month and the variable cost is $30 per unit produced. Solve, a. What is the maximum profit per month related to thisproduct? b. What is the range of profitable demand during a month?

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