Question: Table below gives the output in tons Q, the labour inputs in hours, L, and the capital input in machine hours K, of 14 firms in the beef processing industry.
|
Firms
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
11
|
12
|
13
|
14
|
|
Q
|
240
|
400
|
110
|
530
|
590
|
470
|
450
|
160
|
290
|
490
|
350
|
550
|
560
|
430
|
|
L
|
1480
|
1660
|
1150
|
1790
|
1880
|
1860
|
1940
|
1240
|
1240
|
1850
|
1570
|
1700
|
2000
|
1850
|
|
K
|
410
|
450
|
380
|
430
|
480
|
450
|
490
|
395
|
430
|
460
|
435
|
470
|
480
|
440
|
(i) Fit the data to the Cobb-Douglas production function: ?? = ??0????1????2???? (Hint. Transform the data and have a double-log equation).
(ii) Test the hypothesis for labour and Capital? Are these factors significantly influencing quantity of beef produced? How can you justify.
(iii) Discuss the criteria would you use to evaluate the overall model performance?
(iv) Interpret the values of the beta coefficients estimated.