Mr. Smart, is considering building a steel mill. after reviewing the design, he is concerned about the proposed mix of capital and labor. he has asked you to review different output combinations using historical data from the United States. the data includes 27 observations of output, labor and investment value.

a) use the appropriate notation to be able to estimate the cobb-Douglas production function using linear regression analysis.

Y = ₀L^₁K^₂ where Y is output, L is labor and K is capital

b) use the appropriate notation to be able to estimate the Cobb-Douglas production function by linear regression analysis where the condition is that ₁ - ₂ =1

e) Write down these three production functions and compare them. set up a table using labor and capital to predict output for these 27 observations. What is their average deviation from the actual quantity and what are the highest values of the deviation. Which production function comes out best and do we need to consider autocorrelation here or not?