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Question: Suppose the production Function of Adama metal sheet company is estimated as follows:
Q = boLb1kb2Eb3
WhereQ = outputL = labor input in worker hoursK = capital input in machine hoursE = energy input in
Each of the parameters of this model was estimated by regression analysis using monthly data over a recent 3-year period. Coefficient estimation results were as follows:
ˆb0 = 0.9; ˆb1 = 0.4; ˆb2 = 0.4; ˆb3 = 0.2
The standard error estimates for each coefficient areˆb0 = 0.6; ˆb1 = 0.1; ˆb2 = 0.2; ˆb3 = 0.1
a. Estimate the effect on output of a 1% decline in worker hours (holding K and E constant).
b. Estimate the effect on output of a 5% reduction in machine hours availability accompanied by a 5% decline in energy input (holding L constant).
c. Estimate the returns to scale for this production system
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The policies of the federal government influence the outcomes of the various activities in that economy. When government policies change or unplanned events occur, the resulting economic events or activity will usually change. Listed below are s..
Most practitioners presently update MRP weekly or biweekly. Would it be more valuable if updated daily, or even on a real-time basis.
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