Does aggregate manufacturing in the United States exhibit increasing, decreasing or constant returns to scale using data from the 2016 Annual Survey of Manufactures (below). Q(K,L) = BoKB1LBze = a. Estimate the production function using linear regression b. Test whether the coefficients on capital and labor are statistically significant. c. Determine the percentage of variation in output that is explained by the regression d. Determine the labor and capital estimated parameters and give an economic interpretation of each value. e. Determine whether this production function exhibits increasing, decreasing or constant returns to scale. 1 Area 2 Alabama 3 Alaska 4 Arizona 5 Arkansas 6 California 7 Colorado 8 Connecticut 9 Delaware 10 District of Columbia 11 Florida 12 Georgia 13 Hawaii 14 Idaho 15 Illinois 16 Indiana 17 lowa 18 Kansas 19 Kentucky 20 Louisiana 21 Maine 22 Maryland 23 Massachusetts 24 Michigan 25 Minnesota Shipments $131,011,841,000 $6,003,375,000 $55,064,569,000 $55,730,733,000 $493,164,860,000 $50,853,388,000 $56,375,967,000 $16,558,424,000 $330,458,000 $104,864,936,000 $166,678,293,000 $5,686,253,000 $20,968,067,000 $252,502,604,000 $241,539,487,000 $105,663,231,000 $83,919,739,000 $128, 159,313,000 $156,873,573,000 $15,168,706,000 $41,213,901,000 $84,735,336,000 $261,293,159,000 $117.396.874.000 Capital $4,187,468,000 $204,082,000 $1,924,308,000 $1,994,511,000 $13,062,872,000 $1,534,982,000 $1,452,456,000 $500,411,000 $9,730,000 $3,927,971,000 $4,450,840,000 $129,621,000 $1,342,579,000 $6,681,908,000 $7,046,728,000 $3,658,211,000 $2,211,855,000 $3,904,222,000 $8,699,895,000 $438,790,000 $1,153,209,000 $2,369,195,000 $7,409,725,000 $3.419.845.000 Labor $7,883,931,000 $442,323,000 $3,989,891,000 $4,720,605,000 $34,022,065,000 $3,713,325,000 $4,730,397,000 $815,965,000 $34,451,000 $7,958,628,000 $11,281,955,000 $311,884,000 $1,944,550,000 $17,266,462,000 $17,132,638,000 $6,562,544,000 $5,318,113,000 $8,549,723,000 $4,924,883,000 $1,733,601,000 $2,753,954,000 $6,677,561,000 $19,867,784,000 $8.984.103.000 26 Mississippi 27 Missouri 28 Montana 29 Nebraska 30 Nevada 31 New Hampshire 32 New Jersey 33 New Mexico 34 New York 35 North Carolina 36 North Dakota 37 Ohio 38 Oklahoma 39 Oregon 40 Pennsylvania 41 Rhode Island 42 South Carolina 43 South Dakota 44 Tennessee 45 Texas 46 Utah 47 Vermont 48 Virginia 49 Washington 50 West Virginia 51 Wisconsin 52 Wyoming $56,800,980,000 $118,828,217,000 $9,395,915,000 $53,112,394,000 $16,682,244,000 $20,657,897,000 $90,605,119,000 $12,674,490,000 $148,468,741,000 $210,018, 214,000 $13,049,769,000 $312,532,079,000 $56,774,742,000 $57,315,173,000 $217,753,348,000 $11,344,331,000 $108,999,798,000 $17,441,006,000 $149,125,509,000 $523,117,531,000 $48,427,977,000 $8,788,190,000 $99,131,275,000 $142,699,549,000 $23,850,789,000 $168,600,583,000 $6,741,517,000 $1,589,847,000 $2,823,733,000 $642,828,000 $1,109,775,000 $456,874,000 $569,796,000 $2,738,486,000 $502,613,000 $5,140,968,000 $5,152,963,000 $331,143,000 $10,755,438,000 $2,273,823,000 $2,623,293,000 $7,348,275,000 $346,802,000 $3,549,962,000 $433,012,000 $5,121,563,000 $19,745,490,000 $1,581,688,000 $287,792,000 $2,963,327,000 $2,457,880,000 $680,013,000 $4,921,020,000 $453,779,000 $4,323,996,000 $9,029,248,000 $521,860,000 $2,985,799,000 $1,311,893,000 $1,845,339,000 $6,817,652,000 $707,056,000 $12,404,056,000 $12,423,628,000 $752,237,000 $22,046,537,000 $4,024,450,000 $5,221,768,000 $17,289,720,000 $1,144,555,000 $7,513,293,000 $1,263,025,000 $10,236,139,000 $24,677,978,000 $3,561,909,000 $864,498,000 $7,373,975,000 $9,066,530,000 $1,622,830,000 $13,930,528,000 $402,920,000 Does aggregate manufacturing in the United States exhibit increasing, decreasing or constant returns to scale using data from the 2016 Annual Survey of Manufactures (below). Q(K,L) = BoKB1LBze = a. Estimate the production function using linear regression b. Test whether the coefficients on capital and labor are statistically significant. c. Determine the percentage of variation in output that is explained by the regression d. Determine the labor and capital estimated parameters and give an economic interpretation of each value. e. Determine whether this production function exhibits increasing, decreasing or constant returns to scale. 1 Area 2 Alabama 3 Alaska 4 Arizona 5 Arkansas 6 California 7 Colorado 8 Connecticut 9 Delaware 10 District of Columbia 11 Florida 12 Georgia 13 Hawaii 14 Idaho 15 Illinois 16 Indiana 17 lowa 18 Kansas 19 Kentucky 20 Louisiana 21 Maine 22 Maryland 23 Massachusetts 24 Michigan 25 Minnesota Shipments $131,011,841,000 $6,003,375,000 $55,064,569,000 $55,730,733,000 $493,164,860,000 $50,853,388,000 $56,375,967,000 $16,558,424,000 $330,458,000 $104,864,936,000 $166,678,293,000 $5,686,253,000 $20,968,067,000 $252,502,604,000 $241,539,487,000 $105,663,231,000 $83,919,739,000 $128, 159,313,000 $156,873,573,000 $15,168,706,000 $41,213,901,000 $84,735,336,000 $261,293,159,000 $117.396.874.000 Capital $4,187,468,000 $204,082,000 $1,924,308,000 $1,994,511,000 $13,062,872,000 $1,534,982,000 $1,452,456,000 $500,411,000 $9,730,000 $3,927,971,000 $4,450,840,000 $129,621,000 $1,342,579,000 $6,681,908,000 $7,046,728,000 $3,658,211,000 $2,211,855,000 $3,904,222,000 $8,699,895,000 $438,790,000 $1,153,209,000 $2,369,195,000 $7,409,725,000 $3.419.845.000 Labor $7,883,931,000 $442,323,000 $3,989,891,000 $4,720,605,000 $34,022,065,000 $3,713,325,000 $4,730,397,000 $815,965,000 $34,451,000 $7,958,628,000 $11,281,955,000 $311,884,000 $1,944,550,000 $17,266,462,000 $17,132,638,000 $6,562,544,000 $5,318,113,000 $8,549,723,000 $4,924,883,000 $1,733,601,000 $2,753,954,000 $6,677,561,000 $19,867,784,000 $8.984.103.000 26 Mississippi 27 Missouri 28 Montana 29 Nebraska 30 Nevada 31 New Hampshire 32 New Jersey 33 New Mexico 34 New York 35 North Carolina 36 North Dakota 37 Ohio 38 Oklahoma 39 Oregon 40 Pennsylvania 41 Rhode Island 42 South Carolina 43 South Dakota 44 Tennessee 45 Texas 46 Utah 47 Vermont 48 Virginia 49 Washington 50 West Virginia 51 Wisconsin 52 Wyoming $56,800,980,000 $118,828,217,000 $9,395,915,000 $53,112,394,000 $16,682,244,000 $20,657,897,000 $90,605,119,000 $12,674,490,000 $148,468,741,000 $210,018, 214,000 $13,049,769,000 $312,532,079,000 $56,774,742,000 $57,315,173,000 $217,753,348,000 $11,344,331,000 $108,999,798,000 $17,441,006,000 $149,125,509,000 $523,117,531,000 $48,427,977,000 $8,788,190,000 $99,131,275,000 $142,699,549,000 $23,850,789,000 $168,600,583,000 $6,741,517,000 $1,589,847,000 $2,823,733,000 $642,828,000 $1,109,775,000 $456,874,000 $569,796,000 $2,738,486,000 $502,613,000 $5,140,968,000 $5,152,963,000 $331,143,000 $10,755,438,000 $2,273,823,000 $2,623,293,000 $7,348,275,000 $346,802,000 $3,549,962,000 $433,012,000 $5,121,563,000 $19,745,490,000 $1,581,688,000 $287,792,000 $2,963,327,000 $2,457,880,000 $680,013,000 $4,921,020,000 $453,779,000 $4,323,996,000 $9,029,248,000 $521,860,000 $2,985,799,000 $1,311,893,000 $1,845,339,000 $6,817,652,000 $707,056,000 $12,404,056,000 $12,423,628,000 $752,237,000 $22,046,537,000 $4,024,450,000 $5,221,768,000 $17,289,720,000 $1,144,555,000 $7,513,293,000 $1,263,025,000 $10,236,139,000 $24,677,978,000 $3,561,909,000 $864,498,000 $7,373,975,000 $9,066,530,000 $1,622,830,000 $13,930,528,000 $402,920,000