Order the answer to: Consider the following Cobb-Douglas production function for bus service in

Academic Help business economics Order the answer to: Consider the following Cobb-Douglas production function for bus service in

business economics

Order the answer to: Consider the following Cobb-Douglas production function for bus service in

Question Consider the following Cobb-Douglas production function for bus service in a typical metropolitan area: Where Q = output in millions of passenger miles, L = labor input in worker hours, K = capital input in bus transit hours, and F = fuel input in gallons. Each of the parameters of this model was estimated by regression analysis using monthly data over a recent three-year period. Results obtained were as follows: = 1.2; = 0.28; = 0.63; and = 0.12 The standard error estimates for each coefficient are: = 0.4; = 0.15; = 0.12; = 0.07 A. Estimate the effect on output of a 4 percent decline in worker hours (holding K and F constant). B. Estimate the effect on output of a 3 percent reduction in fuel availability accompanied by a 4 percent decline in bus transit hours (holding L constant). C. Estimate the returns to scale for this productionsystem.
Subject business economics
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