(Round all intermediate calculations to at least 4 decimal places.) Economists o
ID: 3227056 • Letter: #
Question
(Round all intermediate calculations to at least 4 decimal places.) Economists often examine the relationship between the inputs of a production function and the resulting output. A common way of modeling this relationship is referred to as the Cobb-Douglas production function. This function can be expressed as In(Q) Bo B1ln(L) B2ln(K) E, where Q stands for output, L for labor, and Kfor capital. The following table lists data relating to the U.S. agricultural industry in the year 2004. Use Table 2.Explanation / Answer
Solution:
a-1: lnQ = -0.1741 + 0.7089 ln(L) + 0.3431 ln(K) + e
a-2: Predicted output increases by about 0.71
b. Yes, since t valueof 6.64 falls in the relevant critical region.
SUMMARY OUTPUT Regression Statistics Multiple R 0.9164 R Square 0.8398 Adjusted R Square 0.8327 Standard Error 0.6676 Observations 48 ANOVA df SS MS F Significance F Regression 2 105.1406 52.57032 117.9694 1.27E-18 Residual 45 20.05319 0.445627 Total 47 125.1938 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -0.1741 0.1526 -1.1406 0.2601 -0.4814 0.1333 X Variable 1 0.7089 0.1068 6.6393 0.0000 0.4938 0.9239 X Variable 2 0.3431 0.1322 2.5959 0.0127 0.0769 0.6093Related Questions
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