Question: Consider estimation of a short-run average variable cost function of the form AVC = a + bQ + cQ 2 Using time-series data, the estimation

Consider estimation of a short-run average variable cost function of the form AVC = a + bQ + cQ 2

Using time-series data, the estimation procedure produces the following computer output:

DEPENDENT VARIABLE: AVC RSQUARE FRATIO PVALUE ON F

OBSERVATIONS: 22 0.8557 56.32 0.0001

VARIABLE PARAMETER ESTIMATE STANDARD ERROR TRATIO / PVALUE

INTERCEPT 75.0 26.5 xxxx / xxxx

Q 0.0120 0.0058 xxxx / xxxx

Q2 0.00006 0.000013 xxxx / xxxx

a) Of the three parameter estimates a , b, and c , test the estimates that are statistically significant at the 5 percent level. [Hint: please refer to Appendix for a t-values table]

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