cost regression project

Project Description:

data: tvacostdata.xls under cost project data on d2l
1. the data file contains actual cost and output data for tva non-hydroelectric plants in 2003.
use this data file to run a linear regression as specified below. have the computer program plot
the actual vs. predicted values of the dependent variable (in excel, check the box marked “line
fit plots”).

dependent variable: avc
explanatory variables: q, qsq.

a. which coefficients (including the constant) are statistically significant at the 10% level or
better? which are not significant?
b. how much of the variation in the dependent variable is explained by the estimated
c. is the equation as a whole statistically significant? at what level?
d. is the estimated average variable cost curve u-shaped? why?
2. a. calculate the output quantity at which avc is minimized.
b. calculate the value of avc at its minimum point.
c. calculate the value of marginal cost at the quantity that minimizes avc.
d. calculate the estimated values of average variable cost at output levels of 5,000 and 15,000.
e. calculate the estimated values for marginal cost at output levels of 5,000 and 15,000.
attach copies of your regression output along with your answers.
show your work on all calculations.
you may cooperate or work in groups to run the regressions. groups may turn in one completed
task identifying all students in the group. the regressions may be run in excel or the
statistical package of your choice (minitab, etc.)
Skills Required:
Project Stats:

Price Type: Fixed

Project Budget: $10 to $20
Total Proposals: 7
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