When estimating a cubic short-run production function $Q = A L ^ { 3 } + B L ^ { 2 }$ using linear regression analysis,you must A)transform the equation into linear form by defining L3 and L2 as L³ and L²,respectively. B)suppress the intercept term (regress through the origin). C)convert the right-hand-side variables to logarithms. D)both a and b E)both b and c

Question

Quizplus · Accepted Answer

To estimate a cubic short-run production function $Q = A L ^ { 3 } + B L ^ { 2 }$ using linear regression analysis, you can transform the equation into a linear form by defining $L^3$ and $L^2$ as new variables (option A) and suppress the intercept term to regress through the origin (option B), making both A and B correct.

When Estimating a Cubic Short-Run Production Function Q=AL3+BL2Q = A L ^ { 3 } + B L ^ { 2 }Q=AL3+BL2

When Estimating a Cubic Short-Run Production Function $Q = A L ^ { 3 } + B L ^ { 2 }$