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The following results were obtained from a sample of 12 firms on their output (Y), labor input (X1) and capital input (X2), measured in arbitrary

The following results were obtained from a sample of 12 firms on their output (Y), labor input (X1) and capital input (X2), measured in arbitrary units ΣY=753ΣX1=643ΣX2=106ΣY2=48,139ΣX12=34,843ΣX22=976ΣYX1=40,830ΣYX2=6,796ΣX1X2=5,779


(a) Find the least squares equation of Y on X1 and X2. What is the economic meaning of your coefficients?


(b) Given the following sample values of output ( Y ), compute the standard errors of the estimates and test their statistical significance.

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