1. You collect the following production data for your firm: L Q 301 2 1,436 6 632 3 69 1 1,813 9 1,078 5 □ a. Which functional form (linear, quadratic, cubic) is most suitable to your data? Construct a scatter diagram but be sure to just do the dots; don't include the lines that connect them. Then, play around with the trendline feature and include what you consider to be the best trendline. b. Using OLS, estimate the firm's short-run production function. Comment on the strength of the regression results. c. Calculate the Q, AP, and MP for L = 8 workers.

1. You collect the following production data for your firm: L Q 301 2 1,436 6 632 3 69 1 1,813 9 1,078 5 □ a. Which functional form (linear, quadratic, cubic) is most suitable to your data? Construct a scatter diagram but be sure to just do the dots; don't include the lines that connect them. Then, play around with the trendline feature and include what you consider to be the best trendline. b. Using OLS, estimate the firm's short-run production function. Comment on the strength of the regression results. c. Calculate the Q, AP, and MP for L = 8 workers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.

Question

Economics
1. You collect the following production data for your firm:
a. Which functional form (linear, quadratic, cubic) is most
suitable to your data? Construct a scatter diagram but be sure
to just do the dots; don't include the lines that connect them.
Then, play around with the trendline feature and include what
you consider to be the best trendline.
b. Using OLS, estimate the firm's short-run production function.
Comment on the strength of the regression results.
c. Calculate the Q, AP, and MP for L= 8 workers.
d. At 8 workers, is MC rising or falling, and how do you know?
301
2
1,436
6
632
3
69
1
1,813
9
1,078
1,961
5
7
797
4
1,869
11
2,353
10

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Step 2: Determine functional form

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Step 3: Determine production function

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