Reference no: EM133037402

Question 1: The following Table gives the output in tons Q, the labor input in hours L, and capital input in machine hours K, of 14 firms in an industry. Fit the data to the Cobb-Douglas production function and find the values of the beta coefficients by building and appropriate econometric model

Q = b₀L^b1K^b2e¹⁴

Output and Labor and Capital Inputs of 14 Firms in an Industry

Firm	1	2	3	4	5	6	7	8	9	10	11	1 2	13	14
Q	240	400	110	530	590	470	450	160	290	490	150	550l	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

Question 2: The following Table gives the quantity of milk (in thousands of quarts) supplied by a firm per month Q at various prices P over a 14-month period. The firm faced a strike in some of its plants during the fifth, sixth, and seventh months. Run a regression of Q on P (a) testing only for a shift in the intercept during periods of strike and nonstrike and (bj testing for a shift in the intercept and slope.

Quantity Supplied of Milk (in Thousands of Quarts) at Vmvlous Prices

Month	1	2	3	4	5	6	7	8	9	10	11	12	13	14
Q	98	100	103	105	80	87	94	113	116	118	121	123	126	128
P	0.79	0.80	0.82	0.82	0.93	0.95	0.96	0.88	0.88	0.90	0.93	0.94	0.96	0.97