Q2. Suppose you are given the following Cob-Douglas Production Y; = B1X2 X3 exp(ui) for i...
e Do Part e f) Do Part f g) Do Part g (ign dified R2) Q2. Suppose you are given the following Cob-Douglas Production Y = 3,x3x3 expl) for i = 1, 2, ..n, where 31. 3, and Bare population parameters and the u, are IID (0,0%) Note that: Y =output, X2i =labor input, X3i ==capital input, exp = base of the natural logarithm. (a) Transform the above non-linear model, Y; exp(-) to a linear model 5) How do you...
8.5. Consider the Cobb-Douglas production function Y = BILB2 KB where Y= output, L = labor input, and K = capital input. Dividing (1) through by K, we get (Y/K) = B.(L/KB2 KB2+B3-1 Taking the natural log of (2) and adding the error term, we obtain In (Y/K) = Bo + B2 In (L/K) + (B2+ B3 - 1) In K+u; (3) where Bo = In BI. a. Suppose you had data to run the regression (3). How would you...
Suppose you have data on output quantity, labor input, and capital input for all the firms (N-50) in a given industry. Suppose we believe that the production function is Cobb-Douglas: (a) Transform this equation into a linear model so that the parameters can be (b) What is the null-hypothesis for testing whether the production function is (c) Derive the 95% confidence interval for testing the null-hypothesis against estimated by OLS. Give an interpretation of Bi constant returns to scale? the...
Suppose you are given the following production function
Q= 21x + 9x2-x3
Compose a table calculating the Total Product (Q), Marginal
Product (MP) and Average Product (AP), for x ranging from 0 to 9
units.
Using the information from the table, graph these individual
curves and identify the rate of which diminishing marginal returns
are evident. Delineate the stages of production and
explain why Stages I and III are considered as
irrational whereas Stage II is termed as rational. What...
Problem Set on Growth and the Solow Model KIN 1. Suppose that the production function for Serbia is given by Y (a) If you double the amount of capital and double the amount of labor available, does output always double? Show mathematically (b) Rewrite the production function in intensive form. (c) Suppose the savings rate is r and the depreciation rate is m. Derive an expression for the steady state capital per worker and the steady state output per worker....