2.Let us say you have obtained a dataset that includes information about grape production in Okanagan Valley with some additional information about fertilizer use and local weather. You run an OLS regression of annual grape yields on fertilizer amounts and rainfall. The results are:

where

Y_t = the grape yield (kilograms/acre) in year t

F_t = fertilizer intensity (pounds/acre) in year t

R_t = rainfall (cm) in year t

a.Carefully interpret the meaning of the coefficients of 0.12 and 6.21 in terms of impact of F and R on Y.

b.Use the estimates to determine the yield in years with 200, 500 and 800 inches of rainfall, given that the fertilizer intensity was always 120 pounds per acre.

c.Does the constant term of -114 mean that negative amounts of grapes are possible? If not, what is the meaning of that estimate?

d.The grape yield is in unconventional kilograms/acre because it makes for convenient numbers in the regression. If the same data were recorded with the grape yield in more conventional tons/acre, how would the results of your OLS regression look like (write the equation with the new numbers for the betas). Explain.