You work for a fast food company that has many franchises
selling fried chicken. The amount of fried chicken produced by each
store depends on the labour inputs (workers) and capital inputs
(fryers for frying chicken). For each store, you have data on the
amount of fried chicken sold by each store (Chicken,
measured in dollars), the labour input in each store
(Labour, measured in number of hours), the capital input
in each store (Capital, measured in number of fryers). You
believe there may be an interaction
between Labour and Capital therefore
fit the following estimated model.
\hat{Chicken}=3570.377 +30.269\times Labour +22.268 \times
Capital +14.459 \times (Labour \times Capital)
Consider that Capital = 2. Which of the following
interpretations is correct?
Group of answer choices
We estimate that an increase in Capital of 1
fryer is associated with an increase in
expected Chicken of 22.268 dollars
holding Labour constant.
We estimate that an increase in Labour of 1
hour is associated with an increase in
expected Chicken of 30.269 dollars
holding Capital constant.
We estimate that an increase in Labour of 1
hour is associated with an increase in
expected Chicken of 59.187 dollars
holding Capital constant.
We estimate that an increase in Capital of 1
fryer is associated with an increase in
expected Chicken of 14.459 dollars
holding Labour constant.
You work for a fast food company that has many franchises selling fried chicken. The amount of fried chicken produced by
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You work for a fast food company that has many franchises selling fried chicken. The amount of fried chicken produced by
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