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  3. consider the following production function for bus

Consider the following production function for bus transportation in a particular city: Q= a Where Fuel input in...

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Statistics

  1. Consider the following production function for bustransportation in a particular city:

Q= a

Where Fuel input in gallons = F

Capital input in number of busses = K

Labor input in worker hours = L

Output in millions of bus miles = Q

We estimate the various parameters as follows using historicaldata:

                                    α=0.0012,β1=0.45, β2=0.2, β3=0.3

a) Determine output elasticities for Labor.

b) Suppose that labor hours increase by 10%. By what percentagewill output increase?

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The following production function for bus transportation in a particular city Q a Where Fuel input in gallons F Capital    See Answer
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