the following Cobb Q=aLBFB₂K B₂ where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. ortation system in a particular city: Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁=0.45; B₂=0.20; and 33 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? returns to scale appear to characterize this bus transportation system. (Hint: Ignore the issue of statistical significance.)

the following Cobb Q=aLBFB₂K B₂ where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus miles. ortation system in a particular city: Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were obtained: a = 0.0012; B₁=0.45; B₂=0.20; and 33 = 0.30. Determine the labor, fuel, and capital input production elasticities. Input Production Elasticities Labor Fuel Capital Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage change in output? Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the other inputs are held constant, what is the approximate percentage change in output? returns to scale appear to characterize this bus transportation system. (Hint: Ignore the issue of statistical significance.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: When estimating a cubic short-run production function Q =AL³ + BL² using linear regression analysis,…

A: A cubic short-run production function is a mathematical representation of the relationship between…

Q: Consider a data set with 15 observations and consider a multiple linear regression model with 7…

A: We have the following information:Sum of squares total (SST) = 1325Sum of squares regression (SSR) =…

Q: Consider this regression model (1) : Yt = β0 + β1 Ut + β2 Vt + β3 Wt + β4 Xt + εt ; where t= 1, ...,…

A: Given the regression model :

Q: A farmer is determining how much land, q (acres), to actively bring into cultivation over a two year…

A: Marginal benefit, also termed as marginal utility, is defined as the highest amount which the buyers…

Q: A forecaster used the regression equation Qt= a + bt+q₁D₁ + c2D2 + c3D3 and quarterly sales data for…

A: Estimating the usual relationship between the one dependent variable and the one or more independent…

Q: 10-What would be the consequences for the OLS estimator if heteroskedasticity is present in a…

A: The classical linear regression model would adhere to it provided that the other estimates also…

Q: Using OLS regression, how would you estimate a standard Cobb-Douglas production function of the form…

A: The objective of the question is to estimate a Cobb-Douglas production function using Ordinary Least…

Q: In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports the following…

A: Given information log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2…

Q: Given two revenue models (in millions of dollars) for a large corporation, where both models are…

A: Revenue is a key metric for evaluating the monetary overall performance of a organization and is…

Q: Which one of the following statements is true for a linear regression model with non-spherical…

A: Linear regression is maybe one in all the foremost documented and well understood algorithms in…

Q: rue or False For a linear regression model including only an intercept, the OLS estimator of that…

Q: 11. Which of the following statements is not true about multicollinearity? (a) Perfect…

A: Certainly, I'll explain each statement regarding multicollinearity without plagiarism:(a) True:…

Q: Determine the mode choice (personal vehicle or bus system) for the following regression model:…

A: The utility is the measurement of the level of satisfaction one receives from consuming a good or…

Q: You have the same regression as in (e) the coefficient estimate you will get for B2, the coefficient…

A: For each unit change in the independent variable, the slope of the line representing the change in…

Q: The fox population in a certain region has a continuous growth rate of 9 percent per year. It…

A: Population2000 = 29100 t = 0 i.e. 2000 p(0) = 29100 Growth rate 9%

Q: The finished goods inventory of a small manufacturing company is shown below (available in data file…

A: Inventory management teams utilise ABC classification (also known as ABC analysis) to identify the…

Q: The following graph of the estimated residuals from a regression against the observation date (i.e.…

A: Regression refers to a statistical method used in finance, investing, and other systems that…

Q: In the following regression Price = 119.2 + 0.485BDR+23.4Bath +0.156Hsize + 0.002Lsize +0.09 (23.9)…

A: Please find the attached asnwer below-

Q: The following information regarding a dependent variable y and an independent variable x is…

A: The numerical articulation of the connection between a reliant (result or reaction) variable and at…

Q: We have estimated the impact of gross domestic product (GDP), energy consumption (ENERGY) and…

A: Since you have asked multiple questions, we will solve the first-three sub-parts for you. If you…

Q: 1. Suppose that we are interested in measuring the relationship between hourly wage and output…

A: Given The given regression equation: log(hrwaget)=β0+β1logoutphrt+ut .... (1) Here β0 =…

Q: A town with a population of 20 000 loses residents at a rate of 0.4% per month because of a poor…

A: At its most basic, population expansion expands the overall size of the economy, including labour…

Q: 5. The following estimated equation was obtained by OLS regression using quarterly data for 1978 to…

A: Coefficient of determination = Explained sum of squares / (explained sum of squares + residual sum…

Question

Consider the following Cobb-Douglas production function for the bus transportation system in a particular city:
Q=aL B₁F B₂K B₂
where L = labor input in worker hours, F = fuel input in gallons, K = capital input in number of buses, and Q = output measured in millions of bus
miles.
Suppose that the parameters (a, B₁, B2, and B3) of this model were estimated using annual data for the past 25 years. The following results were
obtained:
a = 0.0012; B₁ = 0.45; B₂ = 0.20; and B3 = 0.30.
Determine the labor, fuel, and capital input production elasticities.
Input Production Elasticities
Labor
Fuel
Capital
Suppose that labor input (worker hours) is increased by 1% next year (with the other inputs held constant). What is the approximate percentage
change in output?
Suppose that capital input (number of buses) is decreased by 3% next year (when certain older buses are taken out of service). Assuming that the
other inputs are held constant, what is the approximate percentage change in output?
%
returns to scale appear to characterize this bus transportation system. (Hint: Ignore the issue of statistical significance.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: cobb- Douglas production function:-

VIEW

Step 2: Solution:- part-1)

Step 3: Part-2)

Step 4: Part-3)

Step 5: Part-4)

Solution

Step by step

Solved in 6 steps with 9 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

q18-
Consider the results in Table 3. What is the predicted home size of a householdcomposed of 5 members, renting, and with annual net income equal to 37,150 euros?How does it differ from the predicted home size of a household composed of 1member, owning, and with annual net income equal to 37,150 euros?
You estimated a regression with the following output. Source | SS df MS Number of obs = 289 -------------+---------------------------------- F(1, 287) = 41986.64 Model | 664544048 1 664544048 Prob > F = 0.0000 Residual | 4542496.25 287 15827.5131 R-squared = 0.9932 -------------+---------------------------------- Adj R-squared = 0.9932 Total | 669086544 288 2323217.17 Root MSE = 125.81 ------------------------------------------------------------------------------ Y | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- X | 43.81013 .2138056 204.91 0.000 43.38931 44.23096 _cons | 49.31707 16.96222 2.91 0.004 15.93094 82.70319…
Help!
(a) Obtain the value of x in the equation: 2x + 1 = e3 (b) Consider the following equation: y = x7x-4. Solve for the value of y when x = 0.8.
Please provide the correct answer along with the calculation. Do not use ChatGPT, otherwise I will give a downvote.
Suppose we estimated our multiple linear regression, all of the variables have p values below 0.05 (so they are statistically different from zero) but the intercept has p-value equal to p=0.343. What does it mean?
Disposable income, the amount left after taxes have been paid, is one measure of the health of the economy. Using U.S. Energy Information Administration data for selected years from 2015 and projected to 2040, the U.S. real disposable income per capita (in dollars) can be approximated by the equation I = 707.6t + 39,090 where t is the number of years after 2015. (a) What t-value corresponds to 2021? t = (b) Find the predicted U.S. per capita real disposable income (to the nearest $10) in 2021. $ (c) In what year is the U.S. per capita real disposable income expected to exceed $55,000? Extreme Protection, Inc. manufactures helmets for skiing and snowboarding. The fixed costs for one model of helmet are $6600 per month. Materials and labor for each helmet of this model are $55, and the company sells this helmet to dealers for $85 each. (Let x represent the number of helmets sold. Let C, R, and P be measured in dollars.) (a) For this helmet, write the function for monthly total costs…
This exercise refers to the drunk driving panel data regression summarized below. Regression Analysis of the Effect of Drunk Driving Laws on Traffic Deaths Dependent variable: traffic fatility rate (deaths per 10,000). Regressor Beer tax Drinking age 18 Drinking age 19 Drinking age 20 Drinking age Mandatory jail or community service? Average vehicle miles per driver Unemployment rate Real income per capita (logarithm) Years State Effects? Time effects? (1) 0.41* (0.056) 1982-88 no no (2) (3) (4) -0.62** -0.76*** -0.42 (0.39) (0.33) (0.38) 0.023 (0.078) -0.014 (0.084) -0.023 -0.075 (0.053) (0.064) 0.034 -0.109*** (0.058) (0.058) no yes yes no yes Clustered standard errors? yes yes F-Statistics and p-Values Testing Exclusion of Groups of Variables Time effects=0 (5) -0.76** (0.36) 0.041 0.083 (0.111) (0.115) 0.006 0.015 (0.005) (0.011) -0.068* (0.016) 1.66* (0.66) 1982-88 1982-88 1982-88 1982-88 yes yes yes yes yes yes (6) -0.46 (0.39) -0.004 (0.022) 0.043 (0.101) 0.007 (0.005) -0.064*…
a and b please
Hello, please help me to solve the question (c) and (d) below.Consider this regression model (1) : Yt = β0 + β1 Ut + β2 Vt + β3 Wt + β4 Xt + εt ; where t= 1, ..., 75.We use OLS to estimate the parameters, producing the following model:Ŷt = 1.115 + 0.790 Ut − 0.327 Vt + 0.763 Wt + 0.456 Xt (0.405) (0.178) (0.088) (0.274) (0.017) Given that:R2 = 0.941; Durbin Watson stat DW = 1.907; RSS = 0.0757.(To answer the question, use the 5% level of significance, state clearly H0 and H1 that are tested, the test statistics that are used, and interpret the decisions.) (a) Describe the concepts of unbiasedness and efficiency. State the conditions required of regression (1) in order that the OLS estimators of the model parameters possess these properties. (b) Perform the following tests on the parameters of regression (1): (i) test whether the parameters β1, β2, β3 and β4 are individually statistically significant; (ii) test the overall significance of the regression model;…
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly