<p>我真的崩溃啊刚开始上课就出这么个题只好来找高人帮忙附件里是DATA唉～</p><p>The following case project uses actual telecommunications data to estimate costs for a multi-output operation. You are free to work with you classmates and use any outside sources to help complete the project.&nbsp; Your completed project should consist of two separate parts.&nbsp; One part should contain the coding used to estimate the industry cost function as well as compute other cost related problems.&nbsp; The other part should contain your typed answers.&nbsp;</p><p></p><p>Translog cost functions and subadditivity </p><p></p><p>Suppose that the cost function for US telecommunications is represented by the following functional equation:</p><p></p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ci = Ci(w, y)</p><p></p><p>where w is a vector of input cost variables and y is a vector of output variables. The cost function derived when information on input cost and output is pooled across telecommunications carriers is as follows:</p><p></p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; C = C(w, y)</p><p></p><p>A.) Use the Taylor expansion series to help construct the coal translog cost function.&nbsp; Note that it is only necessary to expand the series to depict a second degree polynomial. What is the property of the coefficients on the input cost variables?&nbsp; What is the property of the coefficients on the second order terms for the input cost variables?</p><p></p><p></p><p>B.) Use the translog cost function from ‘A’ to derive the factor cost elasticities (or cost shares) for the U.S. telecommunications industry.&nbsp; Please explain fully.</p><p></p><p>C.) Please use the telecommunications data that you received by email to estimate the cost function for the telecommunications industry.&nbsp; The specification of your cost function should be taken from the specification you constructed in part ‘A’. Remember that you must use restrictions for homogeneity of degree 1, and you must restrict the parameters in the cost function to be consistent with those in the share equation.&nbsp; </p><p></p><p>Use these estimation results from part ‘C’ to answer the following set of questions.</p><p></p><p>D.) For mean input values what is labor’s cost share?&nbsp; For mean input values what is capital’s cost share?&nbsp; For mean input values what is material’s cost share? Please fully explain how you derived these results.&nbsp; Is the property of the second order terms for the input cost variables satisfied (i.e are the symmetry conditions met)?&nbsp; Please explain fully.</p><p></p><p>E.) Plot the Average and Marginal Cost curves for the sample population output range for this industry (i.e. for the 369 observations).&nbsp; Does your graph depict a decreasing cost industry? Explain.</p><p></p><p>F.) Show whether your cost function meets the theoretical properties of a cost function.&nbsp; Those properties are as follows:</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.) The cost function is increasing in factor prices</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.) The cost function is concave in factor prices for all observation output levels.&nbsp; Note: See Bitzan’s footnote 10 for more on concavity.&nbsp; Also for your assistance a MAPLE program that tests for concavity is attached to this test.&nbsp; This program was graciously provided by Professor Matthew McGinty.&nbsp; Alternatively, you can use the proc iml procedure in SAS to compute the principal minors used to test for concavity.</p><p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.) The cost function satisfies the condition for monotinicity.</p><p></p><p>G.) Calculate the elasticities of substitution (Allen partial elasticities) for the three factor inputs. Explain whether these factor inputs are substitutes or complements.&nbsp; Also calculate the factor price elasticities for the three inputs.</p><p></p><p>H.) Use your cost estimation results to determine whether the condition for subadditivity is satisfied for two hypothetical carriers sharing equally the output levels of the industry across the sample population output range (i.e., each hypothetical firm produces half of the industry output for each type of output). Assume fixed network size. (suggestion: write a simple SAS program for the calculations) Please show all of your work.</p><br/><br/>