Ility Mode EndNote X8 Tell me what you want to do Ddl AaBbCc AaBbCcD AaBbCcDd AaBbCcDc AaBbCcDc e...

ility Mode EndNote X8 Tell me what you want to do Ddl AaBbCc AaBbCcD AaBbCcDd AaBbCcDc AaBbCcDc ext 1 Heading 1 1 Heading 2 1 Heading 3 1 List Para.. 1 No Spac. Select Eiman Al Rubaei Find- ac Repl Styles , Editing A study by Pozdena and Merewitz (1978) uses data from 11 North American transit operators to estimate cost functions for the service. Using data from several years, a total of 105 observations were available to estimate cost functions using regression analysis. The study assumes a Cobb-Douglas production function for the annual output Q, measured in millions of vehicle-miles. The production is assumed to be a function of labor input (measured in annual hours) electricity consumed (measured in annual kilowatt hours) and the length of single track (measured in miles). The total cost function is given by the equation below: The various variables used in this function are described in Table 1. Additionally, the symbols a, c, b1, bz, bs and b4 are the coefficients of the cost function. Note: a is given in (million $ (mile of track). Table 1: Variable Definition SROC: Short run operating costs, measured in millions $ T: Length of a single track, measured in miles Q: w: Unit price of labor ($) Pe: Unit price of electricity ($) Annual output measured in miles 1. Short Run Operating Costs a. Briefly explain what the first and second terms in the SROC function represent b. Also predict the signs for the various coefficients that you expect in this function. Il. Short Run Marginal, Average and Total Costs The following coefficients were estimated using the dataset: SROC- 0.11T+ 789 Ql0wpe86T-0.37 What do the coefficients 1.04, 1.34, 0.65,-0.37 represent? a.