Question #67187

A firm estimates its cubic production function of the following form

Q = AL3 + BL2

and obtains the following estimation results

DEPENDENT VAR: Q F-RATIO: 42.175

OBSERVATIONS 62 R-SQUARE: 0.7631

VARIABLE PARAMETER STANDARD

ESTIMATE ERROR T-RATIO

L3 -0.05 0.013 3.83

L2 0.60 0.25 2.40

The firm pays RM36 per unit for labour services.

The estimated total, average, and marginal product functions are:

Q = ___________________________________________________

AP = __________________________________________________

MP = _________________________________________________

Are the parameters of the correct sign and are they significant?

Average product reaches its maximum value at________ units of labour?

Average product reaches its minimum value at _________units of abour?

At the output level for part d,

AVC = RM____________

SMC = RM____________

When labour usage id 7 units,

AVC = RM___________

SMC = RM___________

Q = AL3 + BL2

and obtains the following estimation results

DEPENDENT VAR: Q F-RATIO: 42.175

OBSERVATIONS 62 R-SQUARE: 0.7631

VARIABLE PARAMETER STANDARD

ESTIMATE ERROR T-RATIO

L3 -0.05 0.013 3.83

L2 0.60 0.25 2.40

The firm pays RM36 per unit for labour services.

The estimated total, average, and marginal product functions are:

Q = ___________________________________________________

AP = __________________________________________________

MP = _________________________________________________

Are the parameters of the correct sign and are they significant?

Average product reaches its maximum value at________ units of labour?

Average product reaches its minimum value at _________units of abour?

At the output level for part d,

AVC = RM____________

SMC = RM____________

When labour usage id 7 units,

AVC = RM___________

SMC = RM___________

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